Monetary easing cycle pulls down Treasury bond rate; BTr raises P25B

The government successfully raised the full amount of P25 billion from Tuesday’s sale of Treasury bonds (T-bonds), thanks to strong demand that enabled it to lock in lower borrowing rate.

Auction results showed that the Bureau of the Treasury had made a full award of P25 billion in reissued T-bonds, which have a remaining life of 14 years and five months.

READ: BTr raises P30-B from T-bonds auction

The offer was met with strong demand, with total bids amounting to P54.6 billion, exceeding the size of original offering by more than twice.
Strong demand from creditors allowed the government to obtain loans at a lower cost.

The debt securities yielded an average rate of 6.103 percent, which is more favorable than the 6.112 percent seen in the secondary market and the 6.781 percent from the previous reissuance.

“This is still because of the onset of Bangko Sentral ng Pilipinas (BSP) rate cuts,” Noel Reyes, chief investment officer for Trust and Asset Management Group at Security Bank Corp. said.

Reyes expects yield to place lower as rate cut expectations from the US Federal Reserve (Fed) are highly anticipated and likewise seen to be followed by the BSP in October. INQ