Treasury sells P20B T-bonds despite higher rate

MANILA, Philippines — The Bureau of the Treasury on Tuesday awarded all P20 billion in reissued T-bonds despite a higher rate of 3.996 percent.

The average annual rate for the treasury bonds maturing on July 4, 2022 rose 3.5 basis points (bp) from the previous reissue last Aug. 29, the Treasury said in a statement.

The auction was 2.5 times oversubscribed as investors tendered a total of P50.751 billion.

To date, this T-bond series had an outstanding volume of P60 billion, the Treasury said.

Despite the increase in rate, Deputy Treasurer Erwin Sta. Ana told reporters after the auction that the Treasury was able to price the debt paper lower than the market benchmark.

Sta. Ana said the over 3-bp rise in rate was being viewed by the Treasury as “flat” from the previous auction in August.

“Over the course of the last few weeks, the rates have inched up a bit but now they have started to moderate a little,” Sta. Ana said.

Sta. Ana attributed the easing rate increases to the Bangko Sentral ng Pilipinas’ announcement of another 100-bp cut in banks’ reserve requirement ratio (RRR) in November that will release more liquidity into the system, and the BSP’s downward adjustment in its 2019 inflation forecast to 2.5 percent from 2.6 percent previously.  /muf