The Bureau of the Treasury (BTr) upsized its award of Treasury bills (T-bills) to P28.6 billion during its auction on Monday as rates declined across the board.

The bureau initially programmed a total offer of P25 billion consisting of 91-day, 182-day and 364-day T-bills. The debt papers drew total bids amounting to P84.3 billion or 3.4 times oversubscription.

The BTr awarded P8 billion for the three-month papers which fetched an average rate of 5.468 percent, down from the 5.515 percent recorded last 19 May.

The Treasury awarded another P8 billion for the six-month papers which posted an average rate of 5.551 percent, declining from the 5.612 percent seen in last week’s auction.

Lastly, the BTr increased its award for the one-year papers to P12.6 billion from P9 billion. These debt papers fetched an average rate of 5.694 percent, decreasing from the 5.702 percent recorded in the previous auction.

T-bill rates reflect expectations

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the lower T-bills’ rates reflected investor expectations of low inflation and interest rates in the remaining months of the year.

He said the easing rates mean minimal losses to investors and sustained economic growth in the second half of the year.

“Global crude oil prices eased to among the lowest in more than four years which would reduce importation costs and overall inflation,” he said.

“Lower inflation could support further monetary rate cuts for the coming months,” Ricafort added.

Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said the Monetary Board is considering two more cuts for its policy rate this year.

This will bring the policy rate down to 5 percent by year-end from the current 5.5 percent.