T-bill rates mostly up on bond sale squeeze

Results of the Treasury Bills auction on Monday, April 21, 2025.

MANILA, Philippines – The Marcos administration was forced to accept mostly higher yields sought by local creditors during Monday’s sale of short-dated Treasury bills (T-bills), as the state’s massive Treasury bond (T-bond) offering tightened local liquidity conditions.

Auction results showed the Bureau of the Treasury (BTr) was able to borrow P25 billion via T-bills, as planned.

The offering was met with strong demand after attracting total tenders amounting to P73.9 billion, three times larger than the original size of the issuance.

READ: Gov’t raises P135B from 10-yr bonds; rate up

But that was not enough to lower borrowing costs for the government.

The BTr said the 91-day T-bill fetched an average rate of 5.546 percent, more expensive than the 5.422 percent seen last week.

The average yield for the 182-day debt paper likewise rose to 5.675 percent, from 5.657 percent previously.

But creditors asked for an average rate of 5.691 percent for the 364-day T-bill, cheaper than the 5.722 percent seen in the previous auction.

In a market commentary, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the ongoing sale of 10-year T-bonds would mop up excess money supply in the financial system, which could have a tightening effect on liquidity conditions.

Recall that the BTr launched its new 10-year benchmark fixed-rate treasury note last week, allowing the government to raise P135 billion. The debt note was made available to investors through an extended offer period format, a first for a non-retail bond offering.

The 10-year T-bonds would be available until April 24, unless terminated earlier by the Treasury.