T-bill yields may drop as market eyes BSP, Fed

RATES for the Treasury bills (T-bills) to be auctioned off this week could continue to go down to track yield movements at the secondary market as players continue to monitor statements from officials of both the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve on their respective policy paths.

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The Bureau of the Treasury (BTr) will auction off P22 billion in T-bills on Monday, or P7.5 billion each in 89-day and 182-day securities, and P7 billion in 364-day papers.

‘The three-month tenor’s maturity was adjusted from the usual 91-day term due to holidays.

T-bill yields could track the slight week-on-week decline seen for comparable benchmarks at the secondary market due to bets on the next moves of the BSP and the Fed, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Last week, BSP Governor Eli M. Remolona, Jr. said they could lower benchmark rates further as early as next month if the economy shows signs of losing momentum.

The Monetary Board last month slashed borrowing costs by 25 bps for a third straight meeting to bring the policy rate to 5%. This brought cumulative cuts since August 2024 to 150 bps.

Mr. Remolona has described the policy setting as a “Goldilocks rate,” balancing inflation and growth.

“So, if the forecast stays... we're going to stay where we are in terms of the policy rate, There may be small adjustments — a pause or an ease — but more or less, we're going to be at the same range.”