Gov’t makes full award of re-issued T-bonds despite high rates

MANILA  -The government was able to borrow as planned during Tuesday’s auction of Treasury bonds despite rates rising for another week.

The Bureau of the Treasury raised its target amount of P30 billion during the auction of re-issued T-bonds, which have  remaining life of six years and nine months.

Total orders for the long-dated debt paper hit P46.1 billion, 1.5 times bigger than the size of the offer.

But despite the high demand, the T-bond fetched an average rate of 6.675 percent, higher than the 6.52 percent yield quoted for the comparable tenor at the secondary market based on PHP Bloomberg Valuation Service.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said local bond rates tracked an uptrend in US Treasury yields amid geopolitical risks due to the Israel crisis.

The government borrows money from creditors at home and abroad to bridge its budget gap, which is capped at 6.1 percent of gross domestic product this year.