The government raised a total of P45 billion from an original issue of 10-year treasury bonds, which carried a coupon of 6.75 percent but fetched an average yield of 6.703 percent.
At the secondary market, the prevailing rate for the 10-year debt paper was pegged at 6.6 percent. Also, the rate for the preceding 10-year T-bond was 6.609 percent.
The Bureau of the Treasury-led auction committee decided to fully award its offer of P35 billion through a regular auction and, subsequently, offered an additional P10 billion through a tap facility.
The committee decided to raise more funds through pro-rata purchases of those who were awarded the government securities in the regular auction.
At the auction, investors tendered at total of P99.31 billion, which was almost thrice the volume offered.
Through the tap facility, investors also made available P24.8 billion or more than twice the P10-billion offer.
“Strong demand kept rates within secondary level even with hawkish statements from the United States Federal Reserve and its commitment to bring down US inflation to their 2-percent target,” National Treasurer Rosalia de Leon told reporters.
The US Fed is widely expected to raise further its policy rate later this month. Rising US interest rates have prompted the Bangko Sentral ng Pilipinas to embark on its own monetary policy tightening.
The BTr first adopted the tap facility — an electronic system that improves the issuance of government debt instruments — in 2009.
The system allows government securities eligible dealers (GSEDs) to electronically bid for additional offerings after a successful auction.
Through such electronic means, the awarding process and the generation of reports will be automated to ease the process of issuing additional securities.
The tap facility is a sub-component of BTr’s automated debt auction processing system, which is an electronic mode by which the national government sells government securities to a network of GSEDs.
Implementation of the tap facility was aimed at enhancing the government’s efficiency in issuing more debt paper, and was expected to help promote the growth and the competitiveness of the country’s capital market.