RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could track the mixed yield movements at the secondary market amid expectations of a retail Treasury bond (RTB) offering next month.

The Bureau of the Treasury (BTr) will auction off P25 billion in T-bills on Monday, or P7 billion in 91-day securities, P8.5 billion in 182-day debt, and P9.5 billion in 364-day papers.

On Tuesday, the government will offer P20 billion in reissued seven-year T-bonds with a remaining life of two years and nine months.

T-bill rates could mostly ease this week and track the week-on-week movements seen at the secondary market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The reissued seven-year bonds could likewise fetch rates at par with secondary market levels amid reports of a possible RTB issuance in August that could increase the supply of debt papers, Mr. Ricafort added.

The T-bonds to be offered this week could be “well received” and fetch rates ranging from 5.775% to 5.825% as the market awaits further information on the RTB offering, a trader said in an e-mail.

At the secondary market on Friday, the 91-day T-bill rose by 2.01 basis points (bps) week on week to end at 5.4506%, based on PHP Bloomberg Valuation Service Reference Rates data as of July 18 published on the Philippine Dealing System’s website. Meanwhile, the 182- and 364-day papers went down by 7.08 bps and 2.56 bps to fetch 5.571% and 5.6578%, respectively.

For its part, the seven-year bond saw its yield rise by 2.93 bps week on week to 6.1243%, while the three-year paper, the tenor closest to the remaining life of the T-bonds on offer this week, went up by 2.69 bps to end at 5.8494%.

Finance Secretary Ralph G. Recto earlier said that the government could borrow more from the domestic market this year to fund the higher budget deficit cap under its latest fiscal program.

The BTr last offered retail Treasury bonds in February 2024, raising P584.86 billion from its offering of five-year notes at a coupon rate of 6.25%.

Last week, the Treasury raised P28.4 billion from its offering of T-bills, higher than the P25-billion plan, as the offer was more than four times oversubscribed, with total bids reaching P102.906 billion.

Broken down, the BTr borrowed P7 billion as planned via the 91-day T-bills as total tenders for the tenor reached P38.156 billion. The three-month paper was quoted at an average rate of 5.475%, down by 5.1 bps from the previous auction, with bids accepted having rates of 5.473% to 5.483%.

Meanwhile, the government raised P11.9 billion from the 182-day securities, higher than the P8.5-billion plan, as bids amounted to P38.85 billion. The average rate of the six-month T-bill was at 5.575%, down by 4.3 bps, with accepted yields ranging from 5.563% to 5.593%.

Lastly, the Treasury sold P9.5 billion as programmed via the 364-day debt papers as demand for the tenor totaled P25.9 billion. The average rate of the one-year paper inched down by 0.6 bp to 5.65%. Accepted bids had rates ranging from 5.63% to 5.66%.

Meanwhile, the reissued seven-year T-bonds to be auctioned off on Tuesday were last offered on June 25, where the government raised P20 billion as planned at an average rate of 5.76%, well above the 3.635% coupon.

The BTr wants to raise P250 billion from the domestic market this month, or P125 billion through T-bills and P125 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.56 trillion or 5.5% of gross domestic product this year. — Aaron Michael C. Sy