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Peso GS Weekly: Range-bound but bias still toward lower yields
Peso Government Securities (GS) continue to find solid demand as dovish policy signals, and limited supply keeps yields anchored despite bouts of profit-taking.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
At the beginning of the week, local Government Securities opened better bid, tracking the overnight US Treasury rally. However, profit-taking soon emerged, pulling most yields back to flat levels, with the 3–6-year sector underperforming and reversing prior steepening. Benchmarks such as RTB 5-18 and 7-70 closed 3 basis points (bps) higher at 5.585% and 5.680%, respectively, while the 10-year tenors 10-69 and 10-73 held steady near 5.810% and 5.860%.
By mid-week, activity picked up, as investors responded to dovish after Finance Secretary Ralph Recto—who sits on the Bangko Sentral ng Pilipinas’ Monetary Board—hinted at further policy rate cuts. Long-term institutional investors and local asset managers turned better buyers, particularly in the 3- to 10-year sector,
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