RATES OF Treasury bills (T-bill) on offer today will likely move sideways as market participants await a slew of domestic economic data in the next few weeks.

The Bureau of the Treasury is offering P15 billion worth of T-bills on Monday, broken down into P4 billion and P5 billion via three- and six-month papers, respectively, and P6 billion from the one-year debt papers.

Kevin S. Palma, Robinsons Bank Corp. peso sovereign debt trader, said yields on the T-bills will likely be flat to five basis points (bp) higher from the previous auction.

Last week, the government partially awarded the T-bills it offered, raising just P7.1 billion out of the P15 billion programmed, as it rejected all bids on the 364-day papers amid weaker demand.

The BTr accepted P4 billion as planned for the 91-day papers, fetching an average rate of 5.608%. Meanwhile, the Treasury partially awarded the 181-day IOUs, accepting only P3.1 billion and raking in a 5.996% yield.

At the secondary market on Friday, rates of the three-month, six-month and one-year papers stood at 5.732%, 5.964% and 6.105%, respectively, based on the PHP Bloomberg Valuation Service Reference Rates.

“The market is still cautious ahead of key data to be released in the next few weeks such as April CPI (consumer price index), Philippine GDP (gross domestic product) growth in the first quarter, and the much awaited Monetary Board meeting on May 9,” Mr. Palma said in a Viber message on Friday.

Rizal Commercial Banking Corp. economist Michael L. Ricafort said food costs likely eased further in April, especially rice prices, even as the mild El Niño phenomenon is expected to continue until August.

The downward trend of inflation gives the Bangko Sentral ng Pilipinas (BSP) some support to start easing monetary policy on its May 9 meeting.

BSP Governor Benjamin E. Diokno said earlier this month that a cut in benchmark interest rates will be considered on its meeting next month, given that inflation is “right now… under control.”

“We’re considering it. I’m sure that will be on the agenda in the next policy meeting,” Mr. Diokno said.

The Philippine Statistics Authority will release April inflation data on May 7.

Meanwhile, another trader said rates of the T-bills will likely move sideways across all tenors amid “continued strong demand” on the short end.

“If the bids are higher than the rates in the secondary market or higher than expected, the BTr may still opt to reject,” the trader said in a phone interview on Friday.

The government plans to borrow P315 billion from the domestic market this quarter, broken down into P195 billion in T-bills and P120 billion through Treasury bonds. — Karl Angelo N. Vidal

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