Peso GS Weekly: Quiet start before auctions

Trading in the Peso Government Securities market kicked off the shortened trading week on a subdued note, with most participants remaining on the sidelines ahead of this week’s bond auctions. R5-18 (3.1Y) dominated flows, closing 4 basis points (bps) lower at 5.515%, despite upcoming supply in the same tenor. The rest of the curve saw minimal movement, with 7-70 (4.6Y) and 10-73 (9.3Y) ending near previous levels at 5.790% and 6.010%, respectively.

Liquidity remained thin as holiday effects lingered, and price action was largely range-bound. Some opportunistic buying emerged in the belly of the curve, but volumes stayed light. Market sentiment was cautious, with participants focused on positioning ahead of the Bureau of the Treasury’s (BTr) first bond auction of the year.

At the end of the week, attention shifted firmly to the following week’s dual-tranche auction, where the BTr is set to issue up to PHP 50 billion in 3- and 10-year bonds. Indicative ranges for 7-65 (3Y) and 10-73 (10Y) were seen at 5.475–5.600% and 5.975–6.100%, respectively. Meanwhile, the release of the Philippines’ December inflation data loomed, with consensus at 1.30%, likely influencing expectations for the Bangko Sentral ng Pilipinas’ monetary policy stance.

This week, activity should pick up, as participants return from the holidays and position for the first bond auction of 2026. Focus will be on bidding dynamics and inflation data, both of which could set the tone for near-term yields.

Note: Rates are indicative and subject to refresh.

JANSSEN ROMAN is an Investment Counselor at Metrobank, under the Institutional Investors Coverage Division. His expertise was built upon his previous roles as an Investment Specialist and Financial Markets Sector Management Trainee within Metrobank. He is pursuing his Master of Arts in Economics from Ateneo de Manila University and has earned other certifications and licenses from various regulators and educational institutions. Outside work, he dabbles in photography, travel, and motorcycle riding.