Despite lower demand from domestic lenders, the Marcos Jr. administration borrowed more than its planned amount of ₱22 billion through the sale of short-dated treasury bills (T-bills) at slightly lower costs, driven by heightened expectations of the United States (US) Federal Reserve’s (Fed) easing this week.

During the latest T-bill auction on Monday, Oct. 27, the Bureau of the Treasury (BTr) exceeded its planned fundraising of ₱22 billion, with total bids reaching ₱85.5 billion—nearly four times the amount of debt paper offered.

This week’s total bids were lower than the ₱97.2 billion in tenders from the previous T-bill auction on Oct. 20.

The government fully awarded the ₱7-billion offering for 91-day T-bills, with tenders reaching ₱29.6 billion. The average rate was 4.858 percent, 2.6-basis points (bps) lower than the 4.884 percent in the previous week.

From 182-day debt paper, the BTr raised ₱10.5 billion, exceeding the ₱7.5-billion offered amount. Bids reached ₱33.5 billion, fetching an average rate of 5.044 percent, 1.4-bps lower than last week’s 5.058 percent.

Lastly, the BTr borrowed the offered ₱7.5 billion through 364-day IOUs, with demand reaching ₱22.4 billion. Similarly, the average rate dropped slightly to 5.093 percent from 5.097 percent in the previous auction.

Prior to Monday’s auction, PHP Bloomberg Valuation (PHP BVAL) Reference Rates showed that the 91-, 182-, and 364-day T-bills were quoted at 4.926 percent, 5.098 percent, and 5.163 percent, respectively.

Reference rates across the board dropped from the previous week’s levels. Meanwhile, average rates across the board remained higher than the key borrowing cost set by the Bangko Sentral ng Pilipinas (BSP) at 4.75 percent.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the average borrowing costs for T-bills dropped to their lowest in nearly four months, supported by the continuing effects of the surprise 25-bp easing by the Bangko Sentral ng Pilipinas (BSP) earlier this month.

Ricafort said T-bill average yields mostly declined ahead of the Fed’s expected quarter-point rate cut at its Oct. 29 meeting, following dovish remarks from several Fed officials.

The move, he said, could pave the way for similar adjustments by the BSP to maintain rate differentials.

“More” local monetary officials are also dovish in their monetary policy stance for the last policy meeting in December, he added.