The Treasury will auction P50 billion in 91‑ and 182‑day bills on Monday, priced at P20 each, and P10 billion of 364‑day debt. Tuesday’s auction will reissue 20‑year bonds worth P30 billion with a remaining life of 4 years and 11 months.
Analysts expect T‑bill rates to hold steady or rise slightly, while the reissued bonds may see marginally lower rates as secondary‑market yields move ahead of July inflation data.
July consumer price index is forecast at 6.4%, matching June levels but well above the 4% ceiling. The forecast falls within the central bank’s 5.6%–6.6% range and marks the fifth consecutive month the CPI has exceeded the ceiling.
The central bank has lifted benchmark rates by 50 basis points since April, setting the reverse repurchase rate at 4.75%. Officials noted a small chance of a 50‑basis‑point hike amid volatility and potential inflationary pressures from a weaker peso and tax reforms.
The Fed left policy unchanged in its recent meeting, a split decision that sent yields lower and left markets uncertain about future tightening. The Treasury market yield curve flattened, with short‑dated yields rising more sharply than longer‑dated ones.
The Monday auction raised the full P50 billion, with total tenders reaching P134.5 billion. The 91‑day bill yielded 5.059%, the 182‑day 5.671%, and the 364‑day 5.95%.
The reissued 20‑year bonds last sold on July 7 at a 6.869% yield, below the 8% coupon. The Treasury plans to raise P330 billion this month, with P200 billion from bills and P130 billion from bonds, to fund a budget deficit capped at P1.659 trillion.
Secondary‑market yields on Friday were 5.0625% for 91‑day, 5.5261% for 182‑day, and 5.9487% for 364‑day bills. The 20‑year bond yielded 7.5414%, while the 5‑year bond traded at 7.3259%, reflecting week‑over‑week changes.
Market participants anticipate the Tuesday bond auction to be well‑received, with papers expected to fetch rates between 7.175% and 7.2%.
