RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) to be auctioned off this week may continue to track secondary market yields as markets continue to calibrate their bets on the path of monetary policy here and in the United States, especially with US President-elect Donald J. Trump set to take office later this month.

The Bureau of the Treasury (BTr) will auction off P22 billion in T-bills on Monday, or P7 billion each in 91- and 182-day papers and P8 billion in 364-day papers.

On Tuesday, the government will offer P30 billion in reissued 10-year T-bonds with a remaining life of seven years and eight months.

Yields on government debt could track secondary market movements as investors remain watchful of data and developments that could affect the path of benchmark interest rates here and in the US, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Friday, the 91-, 182-, and 364-day T-bills went down by 7.75 basis points (bps), 15.31 bps, and 19.29 bps to end at 5.7511%, 5.8199%, and 5.8562%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data as of Jan. 10 published on the Philippine Dealing System’s website.

Meanwhile, the 10-year bond’s yield inched down by 0.82 bp to close at 6.1485% on Friday, while the seven-year paper, the tenor closest to the remaining life of the T-bonds to be offered this week, decreased by 3.25 bps to end at 6.1093%.

Mr. Ricafort said yields on short-term papers have continued to go down due to cautious signals from Fed officials and expectations of more rate cuts from the Bangko Sentral ng Pilipinas (BSP).

A trader added in an e-mail that the T-bonds on offer on Tuesday could fetch rates ranging from 6.08% to 6.14% amid healthy demand.

The US job market again defied an anticipated slowdown, with firms adding more than a quarter of a million jobs in the final month of 2024 and leaving Federal Reserve policy makers to puzzle over the need for more interest rate cuts in a strong economy, Reuters reported.

The gain of 256,000 jobs in December went well beyond the 160,000 expected by economists in a Reuters poll. The unemployment rate, as reported in the Labor department’s monthly jobs report, ticked down to 4.1% from 4.2%.

Stickier-than-expected inflation and uncertainty over the effects of Mr. Trump’s new economic policies when he takes power on Jan. 20 had already put US central bankers on a path for slower interest rate cuts this year. Last month many started to pencil in faster growth and more inflation to take into account Mr. Trump’s plans for broader tariffs, tax cuts and limits on immigration.

The renewed strength in the job market poses a fresh dilemma, adding to arguments that inflationary pressures may not be fully quenched and setting up a potential conflict with Mr. Trump, who has already said he thinks interest rates are too high and the economy is in need of more support.

Meanwhile, BSP Governor Eli M. Remolona, Jr. last week said the Philippine central bank still has room to continue cutting interest rates as inflation is well within its annual goal, adding that current benchmark borrowing costs remain “restrictive.”

The Monetary Board has slashed benchmark borrowing costs by a total of 75 bps since it began its easing cycle in August, bringing its policy rate to 5.75%.

Mr. Remolona previously said that while the BSP remains in an easing cycle, 100 bps worth of cuts this year may be “too much” amid inflation concerns. He added that they will continue to bring down benchmark interest rates in “baby steps.”

The BTr plans to raise P213 billion from the domestic market this month, or P88 billion via T-bills and P125 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of gross domestic product this year. — A.M.C. Sy with Reuters