The Bureau of the Treasury (BTr) made a full award of Treasury bills or T-bills worth P22 billion on Monday as rates declined amid expectations of a looser monetary policy by the central bank this year.

BTr auctioned off 92-day, 182-day, and 364-day debt papers valued at P7 billion for the first two tenors and P8 billion for the third tenor.

Total bids surged to P71 billion or 3.2 times bigger than the programmed total offer by the government agency.

BTr awarded the entire P7 billion for the three-month papers which fetched an average rate of 5.782 percent, down from 5.818 percent posted in the auction on 16 December 2024.

BTr awarded another P7 billion for the six-month papers which had an average rate of 5.911 percent, lower than the 5.975 percent recorded on the same day of last year.

Finally, BTr awarded P8 billion for the one-year papers which fetched an average rate of 5.931 percent, down from 5.977 percent.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the rates fell after the Bangko Sentral ng Pilipinas (BSP) eased its policy rate further to 5.75 percent in December, bringing its total cut to 75 basis points last year amid low inflation rates.

“Treasury bills’ average auction yields corrected slightly lower, after slightly rising in 11 straight weeks,” he said.

Price rises within goal

Ricafort said the BSP Monetary Board projects inflation rates to remain within its target of 2 to 4 percent this year, signaling few risks to investors’ gains.

“Further cuts in local monetary policy rates are possible if the peso-US dollar exchange rate remains relatively stable or stronger and global crude oil prices continue to be low after three-year lows,” the economist said.

In its meeting in December, the BSP Monetary Board slightly raised its risk-adjusted average inflation for this year to 3.4 percent from 3.3 percent it announced in October.

For 2026, the Board maintained the risk-adjusted inflation at 3.7 percent.

Ricafort shared that BSP Governor Eli Remolona Jr. endorses “baby steps” in easing the policy rate due to lingering inflationary risks.

BSP Assistant Governor Zeno Ronald Abenoja elaborated risks to overall inflation might stem from geopolitical tensions, bad weather, higher transport fares and electricity, and economic uncertainties under the returning Trump presidency in the US.