THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday even as yields corrected higher amid broad market volatility due to overseas concerns and before the release of September inflation data and the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.
The Bureau of the Treasury (BTr) raised P22 billion as planned from the T-bills it auctioned off as the offering was more than three times oversubscribed, with total bids reaching P74.514 billion. However, this was lower than the P80.475 billion in tenders recorded on Sept. 29.
Broken down, the Treasury borrowed P7.5 billion as planned via the 91-day T-bills as total tenders for the tenor reached P19.925 billion. The three-month paper was quoted at an average rate of 4.983%, increasing by 15.5 basis points (bps) from the 4.828% recorded in the previous auction. Yields accepted were from 4.88% to 5.047%.
The government also raised P7.5 billion as programmed from the 182-day securities as tenders amounted to P30.11 billion. The average rate of the six-month T-bill was at 5.128%, up by 5.3 bps from the 5.075% fetched last week, with accepted rates spanning from 5.08% to 5.175%.
Lastly, the Treasury sold the planned P7 billion in 364-day debt as demand for the tenor totaled P24.479 billion. The average rate of the one-year T-bill rose by 5.7 bps to 5.228% from 5.171% previously. Bids awarded carried yields from 5.18% to 5.265%.
At the secondary market before Monday’s auction, the 91-, 182-, and 364-day T-bills were quoted at 4.9153%, 5.1765%, and 5.3262%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the Treasury.
T-bill yields corrected slightly higher after 13 straight weeks of decline to track the week-on-week increase seen at the secondary market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
He said this came ahead of the release of the September inflation report on Tuesday (Oct. 7), which is expected to show a faster print from the previous month due to a low base and as prices of some food product may have spiked following the typhoons that hit the country.
A BusinessWorld poll of 12 analysts yielded a median estimate of 1.9% for the September consumer price index (CPI), within the BSP’s 1.5-2.3% forecast for the month. If realized, this would be faster than 1.5% in August but would match the 1.9% clip in September 2024.
Mr. Ricafort added that the market is also awaiting the Monetary Board’s policy meeting on Thursday.
A separate BusinessWorld poll showed that 10 of 16 analysts expect the BSP to pause at this week’s meeting due to emerging inflation risks following three consecutive cuts that brought its policy rate to 5%. The remaining six said the central bank could deliver a fourth straight 25-bp cut to support the economy amid weaker growth prospects.
“The yields noticeably moved higher earlier, likely due to a combination of last Friday’s general uptick in yields (likely due to the US government shutdown), as well as the lack of catalysts until the release of September inflation data as well as the BSP meeting later this week. The decline in demand could also be attributed to the same lack of catalysts,” a trader said in a text message.
The Trump administration will start mass layoffs of federal workers if President Donald J. Trump decides negotiations with congressional Democrats to end a partial government shutdown are “absolutely going nowhere,” a senior White House official said on Sunday, Reuters reported.
As the shutdown entered its fifth day, White House National Economic Council Director Kevin Hassett told CNN’s State of the Union program he still saw a chance that Democrats would back down, averting a costly shutdown and federal employee layoffs that have been threatened by White House budget director Russell Vought.
No tangible signs of negotiations have emerged between congressional leaders since Mr. Trump met with them last week. The shutdown began on Oct. 1, the start of federal fiscal 2026, after Senate Democrats rejected a short-term funding measure that would keep federal agencies open through Nov. 21.
On Tuesday, the government will offer P35 billion in a dual-tenor Treasury bond (T-bond) offering, or P15 billion in reissued seven-year papers with a remaining life of two years and six months, and P20 billion in reissued 10-year debt with a remaining life of nine years and six months.
The BTr is looking to raise P180 billion from the domestic market this month, or P110 billion via T-bills and P70 billion through T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.56 trillion or 5.5% of gross domestic product this year. — Aaron Michael C. Sy with Reuters