Despite higher rate, BTr fully awarded T-bond offering

The Bureau of the Treasury fully awarded all P15 billion in reissued 10-year T-bonds amid strong demand even as the yield increased.

Tenders reached P28.356 billion, making the auction almost twice oversubscribed.

The annual rate hit 4.718 percent, up 2.6 basis points from the average when the debt paper was first reissued in June, the Treasury said in a statement.

The Treasury nonetheless noted that the yield was “well within internal estimates.”

After two reissuances, the IOU, which is maturing on May 4, 2027, has an outstanding volume worth P39.7 billion.
“We see demand on the end of the curve in spite of the weakness in the peso right now. But given the statement of the Bangko Sentral Governor on the peso, we should not focus on that but more on the fundamentals since they’re very strong,” National Treasurer Rosalia V. de Leon told reporters after the auction.

On Monday, BSP Governor Nestor A. Espenilla Jr. said the peso was expected to regain stability in the near term on the back of solid macroeconomic fundamentals even as it dipped to nearly 11-year lows during the past two months.

De Leon also attributed the strong demand for government securities on the second-quarter gross domestic product growth of 6.5 percent, which was among the fastest in the region.

Also, “we see there’s an interest on the ‘Marawi bonds’ so we have been hearing a lot of queries on its features and when we are going to the market for the issuance,” de Leon added.

Earlier, Finance Secretary Carlos G. Dominguez III ordered the Treasury to look into the possible issuance of P30 billion worth of 20-year government securities to be called Marawi bonds to finance the reconstruction and rehabilitation of the city flattened by three months of fighting to date.

“Marawi bonds would appeal to the patriotic sense of duty of citizens who would like to help rebuild the lives of their fellow Filipinos in Marawi. These are what you would call ‘patriotic’ bonds to help augment the funds that the government has set aside for Marawi’s rehabilitation,” Dominguez said.

According to de Leon, the Treasury is awaiting the government’s rehabilitation plan as well as the needs assessment of state planning agency National Economic and Development Authority to know how the funds will be used.

“We also have to coordinate with the Department of Budget and Management for the authority for the spending part because we cannot raise funding without the authority to finance,” de Leon added.