UMVA has learned that Philippine government bond yields slipped last week as a tentative lull between the United States and Iran cooled fears of soaring oil prices and runaway inflation.
Based on the latest reference rates, yields on secondary‑market government securities fell an average of 9.58 basis points from the previous week, a clear signal that bond prices rose amid easing geopolitical tension.
Short‑term Treasury bills showed a mixed picture: the 91‑day and 182‑day bills slipped to 4.9893% and 5.4041%, respectively, while the 364‑day bill jumped to 6.1067%.
In the middle of the curve, every tenor fell sharply. Two‑year bonds dropped to 6.8037%, three‑year to 7.0665%, four‑year to 7.2279%, five‑year to 7.3377%, and seven‑year to 7.4708%.
At the long end, the 10‑year, 20‑year and 25‑year papers all slid, landing at 7.5208%, 7.5829% and 7.5548% after declines of 22.53, 9.77 and 12.18 basis points.
Trading activity surged, with bond volume reaching P40.34 billion on Friday, well above the P27.69 billion recorded a week earlier.
According to information obtained by UMVA, a 60‑day cease‑fire between the United States and Iran muted upward pressure on global crude, easing local inflation concerns and prompting the yield dip.
Market participants also noted that the uncertain diplomatic talks over the Strait of Hormuz injected volatility into the bond market, driving the week’s erratic yield movements.
Analysts point to a “higher‑for‑longer” interest‑rate outlook as U.S. data reveal slowing growth yet stubborn inflation, reinforcing the bond market’s sensitivity to global cues.
Locally, yields continue to echo Bangko Sentral ng Pilipinas expectations, inflation trends, and the government’s borrowing needs, suggesting a cautious, slightly upward bias ahead.
Looking forward, traders anticipate that upcoming economic releases—particularly May’s inflation report and key labor data from the United States and the Philippines—could nudge yields higher as policymakers react.
The Philippine Statistics Authority is set to publish May’s inflation figures, with forecasts hovering around a 7.9% consumer price index, a three‑year high that could further influence bond dynamics.
