T-bill yields down on softer Aug inflation

INQUIRER FILE PHOTO

Rates of Treasury bills (T-bills) offered during Monday’s sale eased following the slower-than-expected August inflation.

The Bureau of the Treasury (BTr) raised P22.6 billion from the offer, larger than its original target of P20 billion.

According to the BTr, the auction attracted P64.52 billion in offers, nearly three times the original size of the issuance and way higher compared to last week’s P53.11 billion.

“The decline in T-bill yields reflects market participants continuing to price in the likelihood of Bangko Sentral ng Pilipinas (BSP) easing, a sentiment further reinforced by last month’s softer inflation figures,” a bond trader said.

READ: T-bond rate rates rises: Gov’t raises P30 billion

Consumer prices in August eased to 3.3 percent from 4.4 percent in the previous month and from 5.3 percent a year ago, primarily driven by more gradual hikes in food and transport costs.

The central bank also said it would maintain a “measured approach” to ensuring price stability, following its decision to lower the policy rate by 25 basis points to 6.25 percent during the Monetary Board’s August meeting.

Rates for the 91-day T-bill averaged 5.840 percent, down form last week’s 5.947 percent. The 182-day paper fetched an average yield of 5.980 percent, cheaper compared to the 6.002 percent recorded previously.

Meanwhile, the rate for the 364-day T-bill averaged 6.029 percent, down from the previous auction’s 6.040 percent.

The government aims to raise P195 billion from the domestic market this month, of which P80 billion will come from T-bills and P115 billion via T-bonds.