T-bill, bond rates may be mixed on PHL inflation, Fed hike bets

YIELDS on the Treasury bills (T-bills) and Treasury bonds (T-bonds) up for auction this week may end mixed amid inflation and rate hike bets.

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The Bureau of the Treasury (BTr) will auction off up to P60 billion in T-bills on Monday, or P20 billion each in 91- and 182-day papers and P10-20 billion in 364-day debt.

It will not sell cash management bills (CMBs) this week after offering them weekly along with T-bills since June 15 to raise additional short-term funds amid heightened market volatility stemming from the Middle East war. The CMBs sold by the government last month had tenors of 35 days and 63 days.

On Tuesday, the government is targeting to raise P30 billion from reissued 20-year T-bonds with a remaining life of five years and 11 days.

Yields on T-bills and T-bonds could track the mixed week-on-week movements at the secondary market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The upcoming Treasury bill average auction yields could correct, slightly lower or (be) little changed after the comparable short-term PHP BVAL (Bloomberg Valuation Service) yields were slightly lower week on week... ahead of the latest consumer price index (CPI) for June 2026 that could ease from 6.8% in May 2026 in view of the sharp decline in global crude oil prices recently that erased almost all of the increases since the war in Iran started on Feb. 28 that also led to large rollback in local fuel pump prices,” he said.

Meanwhile, the reissued 20-year bonds could fetch a higher average yield to match the week-on-week rise in the rate of the five-year debt at the secondary market and track higher US Treasury yields amid possible rate hikes from the Federal Reserve in the coming months following hawkish signals from policy makers, Mr. Ricafort added.