BTr rejects bids for T-bonds

The Bureau of the Treasury on Tuesday rejected all bids— mostly “throwaway” tenders—for P15 billion in reissued seven-year treasury bonds.

The auction was also undersubscribed as investors tendered only P13.965 billion for the third reissuance of the IOUs maturing in April 2025.

In a statement, the Treasury said the “bids submitted were significantly higher from the previous reissuance and current secondary market rates.”

The coupon rate was 5.75 percent.

“It’s really outrageous, the pricing they are offering to us,” National Treasurer Rosalia V. de Leon told reporters after the auction.

“And it’s undersubscribed, [over] P13 billion only so most of those are really throwaway bids,” De Leon added.

De Leon said the market was mostly on wait-and-see mode ahead of the Bangko Sentral ng Pilipinas’ policy meeting, on expectations that the policymaking Monetary Board will again hike interest rates.

The BSP already raised the policy rate to 3.5 percent or by 25 basis points each in May and June following higher-than-expected inflation, which hit an over five-year high of 5.2 percent last month.

Also, De Leon said the market was waiting for pronouncements from US Federal Reserve chair Jerome Powell to determine the Fed’s next moves.

“So it’s wait-and-see. Nobody would also want to be locked in already at seven years,” according to De Leon.

After the two previous reissuances, the outstanding securities for this series stood at P20.5 billion, the Treasury said.