Philippine bond yields end mixed as markets position for possible BSP cut

YIELDS on Philippine government securities were mixed last week as traders positioned for a possible rate cut by the Bangko Sentral ng Pilipinas (BSP) in December.

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Short-term Treasury bill rates slipped, reflecting expectations that the Monetary Board could lower borrowing costs at its Dec. 11 meeting. Moves across the rest of the curve were uneven, with some mediumand long-tenor bonds drifting higher as investors factored in inflation risks linked to a softer peso.

“The declines on the short end reflected market expectations of continued BSP rate cuts in December and in 2026,” a bond trader said.

Governor Eli M. Remolona, Jr. said earlier this month that a reduction is possible and would likely come in a quarter-point step. The central bank has lowered policy rates several times since mid-2024 as growth momentum cooled and inflation stayed subdued.