Debt yields drop on rate cut bets

YIELDS on government securities ended lower across all tenors last week after the Bangko Sentral ng Pilipinas (BSP) signaled that it could cut rates for a third straight time later this month.

- Heather Caitlin P.

GS yields, which move opposite to prices, declined by an average of 4.55 basis points (bps) week on week at the secondary market, based on the PHP Bloomberg Valuation Service Reference Rates as of Aug. 15 published on the Philippine Dealing System’s website.

At the short end, yields on the 91-, 182-, and 364-day Treasury bills (T-bills) fell by 7.83 bps (to 5.2921%), 5.09 bps (5.5066%), and 0.65 bp (to 5.6592%), respectively.

At the belly of the curve, rates of the two, three-, four-, five-, and seven-year Treasury bonds (T-bonds) went down by 2.61 bps (to 5.6597%), 4.67 bps (5.7361%), 5.26 bps (5.7959%), 4.82 bps (5.8469%), and 3.88 bps (5.9254%), respectively.

Lastly, at the long end, yields on the 10-, 20-, and 25-year bonds dropped by 5.91 bps (to 6.0657%), 4.78 bps (6.4165%), and 4.52 bps (6.4170%), respectively.

GS volume traded fell to P61.1 billion on Friday from P90.84 billion on Aug 8.