T-bill rates decline on easing inflation

Rates for Treasury bills declined across all tenors on the back of easing inflation, ample domestic liquidity and expectations of a possible rate cut in the US, the Bureau of the Treasury (BTr) reported yesterday.

During yesterday’s auction, the 91-day T-bills fetched an average rate of 2.995 percent, 4.2 basis points lower than the 3.037 percent recorded in the previous auction.

Total tenders reached P14.65 billion, higher than the P8 billion offer size.

Rates for the 182-day debt papers also averaged 3.171 percent, 24.9 basis points lower than last week’s level of 3.42 percent.

The P6 billion offering was more than twice oversubscribed, with P12.75 billion in total tenders.

Lastly, the average rate for the 364-day securities dropped by 8.9 basis points to 3.577 percent from 3.666 percent last week.

A total of P14.276 billion in bids came in, more than two times higher than the P6 billion offer volume.

In an interview, National Treasurer Rosalia de Leon said the results of the auction were “expected” following the decision of the Bangko Sentral ng Pilipinas to cut the reserve ratio requirement by another 100 basis points in November.

“They (government securities eligible dealers) are already pricing it in,” De Leon said.

De Leon said this also came after weak manufacturing data in the US, which gives the market reason to expect that the US Federal Reserve may deliver a rate cut in October.

“And of course, the pronouncement on inflation for September, that it’s even lower than the consensus. We also expect October inflation would continue to decline,” De Leon said.