The Bureau of the Treasury on Tuesday accepted only P9.732 billion in T-bonds out of the P25 billion offered in order.
This was made to temper yield increases amid market uncertainty ahead of the expected US Federal Reserve rate hike next month.
The re-issued five-year IOUs maturing on Aug. 20, 2020 was undersubscribed, as the auction fetched only P21.517 billion in bids at a coupon rate of 3.375 percent.
The Treasury made the partial award at an average annual rate of 3.8 percent, rejecting the bigger chunk of bids worth P11.785 billion.
According to National Treasurer Roberto B. Tan, who chaired the auction, the volume awarded would allow the rates of government securities to rise gradually and not jump significantly in December.
The market is anticipating a US Fed rate hike next month.
“This appears to be the market direction already. As we approach the next FOMC meeting, market rates will pick up,” Tan said, referring to the Federal Open Market Committee, the US Fed unit that determines monetary policy.
The T-bond sale was conducted a week ahead of the original schedule, as the Treasury moved the auction date to Nov. 11 instead of Nov. 17 because government work had been suspended on the latter date due to the country’s hosting of the Asia-Pacific Economic Cooperation summit next week.