The government fully awarded P15 billion in Treasury bills in its auction on Monday as rates decreased, following signals of a less hawkish stance of the Bangko Sentral ng Pilipinas (BSP).

The Bureau of the Treasury (BTr) auctioned off 91-day, 182-day, and 364-day papers valued at P5 billion each.

The three-month papers fetched an average rate of 5.712 percent, down from 5.727 percent recorded in the auction last week.

6-month debts down

Meanwhile, the six-month papers posted an average rate of 5.864 percent, lower than 5.893 percent seen in the previous auction.

Lastly, the one-year papers fetched an average rate of 6.007 percent, down from 6.037 percent recorded by the BTr in its auction last week.

In the secondary market, rates for short-term debt papers fetched similar levels with 5.863 percent for three-month papers, 5.943 percent for six-month papers, and 6.013 for one-year papers.

Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, said Treasury rates might continue to mirror adjustments to the BSP’s policy rate.

“The latest T-bills rates were similar to the continued slight week-on-week declines in most comparable short-term PHP BVAL yields after less hawkish signals from the BSP,” he said.

BSP Governor Eli Remolona Jr. said the central bank might lower its rate by 25 basis points in the third or fourth quarter of the year if overall inflation stabilizes near 3 percent.

While he is less hawkish, Remolona said the BSP will continue to monitor food and fuel prices as the supply of these goods are threatened by El Niño and geopolitical tensions in the Middle East.

Ricafort said demand for debt instruments in the capital market will likely grow as the projected lower interest and inflation rates drive strong household consumption of goods and services and support companies’ finances for business expansion.