Treasury bill award upsized as rates pushed lower
By Aaron Michael C. Sy, Reporter
THE GOVERNMENT raised more than its programmed amount of Treasury bills (T-bills) at Monday’s auction as strong demand for short-term securities pushed yields lower, with investors factoring in weaker-than-expected economic growth ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting later this month.
The Bureau of the Treasury (BTr) awarded P37.8 billion in T-bills, exceeding the P27-billion offer after bids rose to P176.8 billion from P156 billion at the auction last week.
In response to the heavy demand, the Auction Committee doubled its acceptance of noncompetitive bids across all tenors to P7.2 billion each, the Treasury said in a statement. Average yields for all maturities fell from the previous week’s auction to below secondary market levels.
The Treasury awarded P12.6 billion in 91-day T-bills, above the P9-billion plan, as bids reached P62.1 billion. The three-month paper fetched an average rate of 4.579%, down 8.7 basis points (bps) from 4.666%. Accepted yields were 4.548% to 4.593%.
For the 182-day tenor, the government also borrowed P12.6 billion, surpassing the programmed P9 billion, with tenders hitting P59.818 billion. The average yield eased by 7.9 bps to 4.672% from last week. Rates accepted ranged from 4.63% to 4.7%.
The Treasury likewise raised P12.6 billion from the 364-day T-bills, more than the P9-billion offer, as bids reached P54.89 billion. The one-year paper’s average yield fell by 13.8 bps to 4.689%, with accepted rates at 4.67% to 4.735%.
Before the auction, secondary market rates stood at 4.6826% for the 91-day, 4.7725% for the 182-day and 4.8412% for the 364-day T-bills, based on PHP Bloomberg Valuation Service reference rate data provided by the Treasury.
“The T-bill auction continued to enjoy strong demand, supported by the softer growth outlook and a favorable inflation environment,” a trader said in a text message. “These conditions are already sufficient to exert downward pressure on yields.”
Philippine economic growth slowed to 3% in the fourth quarter of 2025 from 5.3% a year earlier and 3.9% in the third quarter. Full-year growth averaged 4.4%, below the government’s 5.5% to 6.5% target.
“While a BSP rate cut remains possible, the macroeconomic backdrop allows the central bank to remain data-dependent, with scope to adjust liquidity through facilities and reserve settings in the upcoming meeting rather than rush into policy easing,” the trader added.
Analysts said the weaker growth data could increase expectations for further policy easing to support domestic demand. BSP Governor Eli M. Remolona, Jr. has said a rate cut this month is not assured, noting that slower growth alone would not justify easing as inflation remains the central bank’s main focus.
The Monetary Board is scheduled to meet on Feb. 19.
Another trader said strong demand was also driven by a large volume of maturities due next week, prompting investors to reinvest in government securities.
On Tuesday, the government will auction P30 billion in reissued seven-year Treasury bonds with a remaining life of four years and 11 months.
The government plans to raise P308 billion from the domestic market this month, including P108 billion from T-bills and as much as P200 billion from Treasury bonds, to help fund the budget deficit capped at P1.647 trillion, or 5.3% of gross domestic product this year.
