The national government successfully sold its short-term debt papers as benchmark yields decreased after a seven-week rise.

On Monday, Nov. 13, the Bureau of the Treasury executed its auction by fully awarding P15 billion worth of Treasury bills, with a total demand of P46.441 billion, three times higher than the total offering.

The yield on the bellwether 91-day Treasury bill, which banks use to price their loans, dropped to 6.123 percent from 6.352 percent at the previous sale. The 182-day T-bill rate also decreased, down to 6.513 percent from 6.536 percent previously.

Likewise, the 364-day rate dropped to 6.560 percent from 6.591 percent previously.

In the secondary market, yields are higher with the three-month bill standing at 6.185 percent, while the yield on the 12-month bill stood at 6.592 percent, based on the Bloomberg Valuation Service (BVAL) rates.

However, the yield on the six-month bill was lower at 6.458 percent.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said that this may be attributed to the easing of the inflation rate in October at 4.9 percent, which is moving closer to the target rate of two to four percent.

“T-bill auction yields also corrected lower after the national government debt-to-GDP ratio further eased/improved to 60.2 percent, the lowest/best in more than 2 years, vs. the 17-year high of 63.7% a year ago (3Q 2023) after faster economic/GDP growth at 5.9 percent as of 3Q 2023,” he said in a message.

Ricafort also stated that these decreases in yields may support a pause in local policy rates in the upcoming rate-setting meeting on Nov. 16.

“As it is also consistent with the latest Fed rate pause on November 1, 2023, after the +0.25 off-cycle local policy rate hike on October 26, 2023,” he further said.