Quantcast
Latest Stories

7-year T-bond rate falls to 3.875%



The rate for the seven-year treasury bonds fell to a new record low of 3.875 percent in the auction held Tuesday as demand for the virtually risk-free debt instruments significantly surpassed supply.

The latest rate for the bonds was down 87.5 basis points from the previously registered rate of 4.75 percent.

“There is sufficient liquidity in the market and there is appetite [for government securities] given the country’ strong fundamentals and significant improvement in the government’s fiscal condition,” National Treasurer Rosalia de Leon said in a press briefing after the auction.

She said the excess liquidity in the market and confidence in the government’s ability to meet its financial obligations fueled demand for the debt paper. Tenders for the seven-year bonds amounted to P35.43 billion, almost four times the government’s borrowing schedule of P9 billion.

Liquidity in the market is partly attributed to the inflow of foreign portfolio investments. Given the unfavorable economic performance of the United States and the eurozone, some portfolio investors are shifting their investments to emerging market assets such as peso-denominated government securities.

Governor Amando Tetangco Jr. of the Bankgo Sentral ng Pilipinas earlier said that foreign portfolio investments were influenced both by push and pull factors. He said the Philippines’ favorable economic fundamentals “pull” foreign portfolio investments to the country while problems confronting advanced economies “push” investments to emerging markets like the Philippines.

Meantime, De Leon said the treasury bureau would consider making the “onshore dollar bond sale” program of the government a regular activity should the first auction scheduled on November 28 gather significant interest from the market. Under the program, the government will sell dollar-denominated bonds within the country.

Officials said there was no need to borrow dollars from abroad since local banks have plenty of dollars in their vaults.

The strong inflow of dollars into the country has been blamed for the significant appreciation of the peso so far this year. The local currency has appreciated by at least 6 percent since the start of the year, now hovering in the 41-to-a-dollar territory from 43 at the start of the year.—Michelle V. Remo


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Bonds and t-bills , Philippines , t-bond rate , treasury bonds



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Easterlies to prevail in Luzon, Visayas
  • Lacson eyes P106-B ‘Yolanda’ rehab masterplan
  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • No tourist draw, Malang the croc will remain wild
  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • Apple increases stock buyback, will split stock
  • Cost-recovery provisions for affected gencos urged
  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Technology

  • No truth to viral no-visa ‘chronicles’
  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • Filipinos in Middle East urged to get clearance before returning
  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Marketplace