P20B in T-bonds sold as yields fall

The Bureau of the Treasury on Tuesday sold all P20 billion in seven-year Treasury bonds as yields fell on expectations of further monetary easing here and in the United States.

The annual rate for the reissued IOUs maturing on Feb. 14, 2026, was 4.845 percent, down 89.8 basis points from the previous yield and below secondary market rates, the Treasury said in a statement.

Tenders amounted to P74.94 billion, making the auction over 3.5 times oversubscribed.

The yield was a “one-liner”—as all bids converged at that rate, National Treasurer Rosalia V. de Leon told reporters after the auction.

“We expected the rates would be coming down given the recent developments—we’ve heard about pronouncements from both [Federal Reserve Chair] Jerome Powell and [Bangko Sentral ng Pilipinas] Governor [Benjamin] Diokno that the cut on policy rates is on the table,” De Leon explained.

Locally, De Leon noted that an interest rate cut was forthcoming amid “benign inflation.”

The rate of increase in prices of basic commodities fell to a 22-month low of 2.7 percent in June, such that first-half headline inflation averaged 3.4 percent—within the government’s 2-4 percent target range.

The further cut in banks’ reserve requirement ratio  scheduled later this month was also expected to add more liquidity into the system, on top of P54 billion in maturing IOUs this week, De Leon said.

In the United States, Powell recently reported to Congress that the economic outlook “continues to be strong,” hence the rationale for a policy rate cut, she added.