MANILA -The national government raised P30 billion from the full award of all seven-year Treasury bonds, but rates increased.
These were reissued securities with a remaining term of six years and two months, and fetched an average of 6.299 percent.
The resulting yield was 13.7 basis points (bps) higher than the average 6.162 percent recorded in the previous issuance in March.
On the other hand, the resulting rate was 70.1 bps lower than the original coupon rate of 7 percent, set on its first issue in October 2022.
Further, the latest average rate was higher than corresponding rates at the secondary market for government securities, by 11.6 bps against 6.183 percent.
Also, the latest average rate was higher by 5 bps than the 6.249 percent for corresponding corporate bonds at the secondary market.
“The auction was 1.9 times oversubscribed with total tenders reaching P57.8 billion,” the Bureau of the Treasury said in a statement.
“With its decision, the (auction) committee raised the full program of P30 billion, bringing the total outstanding volume for the series to P121.8 billion.
The latest results seem to dispel what First Metro and UA&P Capital Markets Research said in their latest monthly report as factors that “pull down long bonds initially.”
These include the Bangko Sentral ng Pilipinas pause on their interest rate hiking cycle for two consecutive policy meetings in May and June, and the lowering of reserve requirements for universal and commercial banks.
With more money supply coming in due to the BSP decisions, First Metro and UA&P expect that in the second semester of 2023, yields may fall by 25 basis points as inflation loses further steam.
Meanwhile, the Marcos administration’s economic team is now in New York as they drum up interest in a planned issuance of $2 billion worth of dollar-denominated retail T-bonds in September.
National Treasurer Rosalia de Leon has repeatedly said that the national coffers were “still awash with cash,” and thus no rush to raise funds from overseas markets.
Still, the Marcos administration’s economic team has just wrapped up their latest North American sortie, including a visit to New York to drum up interest in their planned $2-billion issue of retail T-bonds.