Treasury sold P20B in 3-year T-bonds

The Bureau of the Treasury on Tuesday sold all P20 billion in reissued treasury bonds that it offered, at a lower average annual rate of 3.742 percent.

In a statement, the Treasury said the average rate not only declined compared to the previous auction but also settled below the secondary market rate of 3.928 percent.
To date, this treasury bond maturing on July 4, 2022, has an outstanding volume of P60 billion.

Bids reached P59.7 billion, making the Treasury’s last auction for 2019 thrice oversubscribed.

As such, the Treasury opened the over-the-counter tap facility to sell another P20 billion of the debt paper on Tuesday afternoon.

National Treasurer Rosalia de Leon attributed the strong demand for the IOUs to the P100 billion in additional liquidity unleashed into the system by the cut in banks’ reserve requirement ratio this month.“And then also they’re (investors) trying to already to finish the year in terms of placements. And it’s a good rate because its coupon was 4.75 percent, so they’re getting a good rate for this,” De Leon added.De Leon was optimistic that demand for the belly or intermediate part of the curve would continue next year.

“That’s the sweet spot right now, and that’s what we saw also in this auction,” she pointed out.

Meanwhile, De Leon said the Treasury sold P3.68 billion in one-year “premyo” bonds—both an investment and raffle tickets for a chance to win up to P1 million in cash and other noncash prizes—to date, exceeding the P3-billion target.

De Leon said they already accepted the residual because these amounted only P680 million, adding that the Treasury had the option to upsize or increase the offer amid good demand.
The Treasury will still accept premyo bond purchases from individuals, associations, cooperatives, provident and retirement funds until Friday, Dec. 13.

“What’s more encouraging is because many individuals participated, you get them to move to government securities,” De Leon said. INQ