Treasury sells P20 billion in 7-year T-bonds as yield drops

By: - Reporter / @bendeveraINQ
/ 04:47 PM July 16, 2019
Ayuntamiento - Bureau of the Treasury

The Ayuntamiento de Manila which houses the Bureau of the Treasury (From the Facebook account of the bureau)

MANILA, Philippines — The Bureau of the Treasury on Tuesday sold all P20 billion in seven-year T-bonds as yields fell on expectations of further monetary easing here and in the U.S.

The annual rate for the reissued IOUs maturing on Feb. 14, 2026, was 4.845%, down 89.8 basis points from the previous yield and below secondary market rates, the Treasury said in a statement.


Tenders amounted P74.94 billion, making the auction over 3.5 times oversubscribed.

The yield was a “one-liner” — as all bids converged at that rate, National Treasurer Rosalia V. de Leon told reporters after the auction.


“We expected the rates would be coming down given the recent developments—we’ve heard about pronouncements from both [Federal Reserve Chair] Jerome Powell and [Bangko Sentral ng Pilipinas] Governor [Benjamin] Diokno that the cut on policy rates in on the table,” de Leon explained.

Locally, De Leon noted that an interest rate cut was forthcoming amid “benign inflation.”

The rate of increase in prices of basic commodities fell to a 22-month low of 2.7% in June, such that first-half headline inflation averaged 3.4% the government’s 2-4% target range.

The further cut in banks’ reserve requirement ratio (RRR) scheduled later this month was also expected to add more liquidity into the system, on top of P54 billion in maturing IOUs this week, De Leon said.

In the US, Powell recently reported to Congress that the economic outlook “continues to be strong,” hence the rationale for a policy rate cut, she added.


Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Bureau of the Treasury, Rosalia V. de Leon, t-bonds
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2019 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.