Gov’t bond yields continue to rise
The Bureau of the Treasury (BTr) on Tuesday raised only a little over half of the amount it wanted to borrow through reissued 10-year bonds amid rising bid rates.
The BTr capped the annual average rate at 6.313 percent for the debt papers maturing in nine years and eight months’ time, such that it awarded P17.6 billion out of the P35-billion offering.
Bids from government securities eligible dealers (GSEDs) hit a high of 6.375 percent and a low of 6.2 percent. The same bond was last awarded at a yield of only 6.009 percent. The secondary market priced similar 10-year bonds at 6.05 percent.
Domestic creditors tendered P56.4 billion for the debt paper maturing in January 2032, making the auction 1.6 times oversubscribed.
To date, the BTr borrowed a cumulative P127.6 billion from this bond series.
The increase in Philippine bond rates came alongside 10-year US treasuries breaking the 2-percent yield, plus projections by Dutch financial giant ING of hitting 3 percent, ahead of the US Federal Reserve’s next policy meeting on May 4. The Fed was expected by the market to aggressively hike interest rates, following the 25-basis point (bp) increase last month, to tame the 40-year-high inflation rates being posted in the United States these past months.
Last Monday, T-bill rates went sideways due to domestic creditors still preferring shorter tenors amid jitters wrought by elevated inflation and the Russian invasion of Ukraine.
The BTr raised P15 billion from the short-dated debt papers it offered, with all P5 billion each in the benchmark 91-, 182- and 364-day securities snapped up.
The average rate of the three-month treasury bill declined to 1.14 percent from 1.223 percent last week. Six-month debt paper was awarded at 1.558 percent, down from 1.568 percent previously.
On the other hand, one-year T-bills fetched an average annual rate of 1.901 percent, up from 1.877 percent during last week’s auction.
National Treasurer Rosalia de Leon last week said GSEDs preferred to park their money in shorter BTr borrowings amid expectations that the US Fed’s monetary tightening would pull investors back to developed markets.
Across the three T-bill tenors, GSEDs’ bids totaled P37.6 billion, making the auction 2.5 times oversubscribed. INQ
