The government fully awarded the short-term securities it offered on Monday, with mixed yields as additional supply entered the market following a two-week pause in cash management bill issuance.
The Bureau of the Treasury raised a combined P80 billion as planned from cash management bills and Treasury bills, with total tenders reaching P210.025 billion.
For the cash management bills, the government awarded its target P30 billion as bids reached P71.615 billion, higher than the P56.28 billion recorded for the same offer volume at the last sale.
The Treasury sold P20 billion in 35-day bills as demand hit P40.515 billion. The one-month paper fetched an average rate of 4.816%, up 1.9 basis points from the previous 4.797%, with accepted yields ranging from 4.75% to 4.868%.
The government raised P10 billion from 63-day bills as tenders reached P31.1 billion. The two-month papers fetched an average rate of 4.967%, down 11.4 basis points from 5.081%, with accepted rates between 4.95% and 4.996%.
For Treasury bills, the government raised P50 billion as planned with total tenders at P138.41 billion, nearly triple the amount offered.
The 91-day T-bills drew P20 billion against P54.67 billion in demand, with an average rate of 5.104%, up 0.7 basis point from last week. The 182-day debt raised P20 billion from P56.33 billion in tenders at an average yield of 5.685%, down 2.2 basis points.
The 364-day securities raised P10 billion from P27.41 billion in bids, fetching an average rate of 5.966%, down 0.6 basis point, with accepted yields from 5.54% to 5.981%.
Prior to the auction, secondary market quotes for the 35-, 91-, 182-, and 364-day tenors stood at 4.7243%, 5.0601%, 5.5324%, and 5.9811%, respectively.
Auction yields were mostly lower, tracking secondary market movements amid easing inflation concerns after a slower June headline print. Renewed geopolitical tensions and a scheduled wage hike in the National Capital Region introduce fresh risks.
The return of cash management bills suggests the government sought cheaper short-end borrowing amid elevated long-end yields. Demand remained consistent for T-bills, while stronger interest in 35-day bills reflected a shift toward short tenors amid market uncertainty.
Headline inflation slowed to 6.4% in June from 6.8% in May, though it stayed above the central bank's 2% to 4% target for a fourth straight month. Core inflation, which excludes volatile food and fuel, rose for a sixth month to 4.4%, the fastest pace in 31 months.
The central bank warned that inflation risks persist, with broadening price pressures and second-round effects evident. It said it is prepared to act further to return inflation to target.
The Monetary Board has raised benchmark rates by 50 basis points since April to curb price pressures linked to the global oil shock. Escalating conflict in the Gulf has lifted oil prices and renewed inflation fears.
Brent crude rose above $90 a barrel for the first time in over a month amid continued regional hostilities, with Brent up 2.4% at $90.18 and US crude up 2.1% at $84.18.
On Tuesday, the government plans to sell P30 billion to P40 billion in reissued seven-year Treasury bonds with a remaining life of four years and five days.
The Treasury aims to raise P410 billion from the domestic market this month, split between P250 billion in T-bills and P160 billion in T-bonds. Borrowings help fund a budget deficit capped at P1.659 trillion, or 5.4% of GDP, this year.
