By Aubrey Rose A. Inosante, Reporter

TREASURY bill (T-bill) rates may decline amid the worsening Russia-Ukraine conflict and as markets await further policy signals from the US Federal Reserve.

“The government securities market was just quiet today as most just stayed on the sidelines amid the Ukraine-Russia geopolitical tension and while awaiting developments for a clearer policy path,” a trader said in an e-mail on Friday.

Russia fired a hypersonic intermediate-range ballistic missile at the Ukrainian city of Dnipro on Thursday in response to the US and UK’s allowing Kyiv to strike Russian territory with advanced Western weapons, in a further escalation of the 33-month-old war, Reuters reported.

The Bureau of the Treasury (BTr) will auction P15 billion in T-bills on Monday — P5 billion each in 91-, 182- and 364-day debt.

On Tuesday, the BTr will also sell P15 billion in reissued five-year Treasury bonds (T-bonds) with a remaining life of four years and five months.

The average T-bill yields could fall amid uncertainty about President-elect Donald J. Trump’s economic policies, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

“The markets priced in possible protectionist policies by Trump that could lead to some increase in US inflation,” he said in a Viber message.

At the secondary market, the 91-, 182- and 364-day T-bills fell across the board, based on PHP Bloomberg Valuation Service Reference Rates data as of Nov. 22 posted on the Philippine Dealing System website.

Last week, the BTr raised P22.6 billion in T-bills as bids reached P51.665 billion, more than twice the amount on offer but lower than the P59.425 billion in tenders a week earlier.

It borrowed P9.1 billion as planned in 91-day T-bills, higher than the programmed P6.5 billion, as tenders reached P20.095 billion. For the 182-day debt, the government fully awarded P6.5 billion, as bids reached P12.76 billion.

The Treasury also raised P7 billion from 364-day bills as demand hit P18.81 billion.

Economists have warned that Mr. Trump’s proposed policies could stoke inflation and lead to fewer Fed rate cuts.

The US Federal Reserve would trim interest rates next month but make shallower cuts in 2025 than expected just a month ago due to the risk of higher inflation from Mr. Trump’s proposed policies, according to most economists in a Reuters poll.

Prospects for a price resurgence based on his planned policies, including higher tariffs and tax reductions, led markets to nearly halve rate cut pricing to about 75 basis points by end-2025 over the past few weeks.

Relentless economic strength, stubborn inflation and stock markets flirting with record highs have become barriers against hasty rate cuts.

Fed Chairman Jerome H. Powell last week said “the economy is not sending any signals that we need to be in a hurry to lower rates.”

The government seeks to raise P90 billion from the domestic market in December — P60 billion in T-bills and P30 billion in T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product this year.