Short-term benchmark interest rates dipped amid less hawkish signals of policy rate cuts.

At the Bureau of the Treasury's auction on Monday, May 20, the national government successfully raised P15 billion through the sale of 91-, 182-, and 364-day IOUs after investors sought lower returns for buying those securities.

The interest rate on the three-month Treasury bill (T-bill) declined to 5.712 percent from 5.727 percent last week.

The government sold P5 billion worth of the debt papers. Investors, however, were willing to buy more, as tenders reached P19.105 billion.

Meanwhile, the 182-day T-bill fetched an average rate of 5.864 percent, down from 5.893 percent when the same IOU was successfully auctioned off last May 13.

Total tenders for the six-month securities amounted to P19.360 billion, higher than the programmed P5 billion.

Lastly, the average rate of the 364-day T-bill has went down to 6.007 percent from 6.037 percent during the last successful auction of the one-year IOU last May 13.

The bureau borrowed P5 billion, but total tenders reached only P20.880 billion.

Total demands reached P59.345 billion, nearly four times higher than the total offering of P15 billion.

The central bank’s Monetary Board has kept borrowing costs unchanged for a fifth straight meeting at 6.50 percent, the highest in 17 years.

Finance Secretary Ralph G. Recto earlier said that the possible policy rate cuts would depend on inflation data.

“And the expectations for inflation this year are lower than expected, than the BSP. But it will still be sticky. I think it will be a little higher next year also. So, let's see,” Recto said.

The inflation readout for April inched up to 3.8 percent, a bit higher than the 3.7 percent recorded previously but lower than the 6.6 percent in April 2023.