Treasury rejects bids on reissued T-bonds

The Bureau of the Treasury on Tuesday rejected all bids for the reissued 20-year T-bonds it offered as these fetched rates higher than prevailing yields.

The treasury bonds with remaining life of 12 years and seven months nonetheless attracted P46.9 billion in tenders, making the P30-billion offering 1.5 times oversubscribed.

Had the bonds been fully awarded, it would have fetched an average annual rate of 3.501 percent, which the Treasury in a statement said was “higher than the secondary market benchmark and trading rate for the security.”

National Treasurer Rosalia de Leon said the bids were “way too high against the valuation for the tenor.”

For an IOU with 12 years to maturity, the rate should have been below 3 percent, De Leon said.

De Leon attributed the higher bid rates to investors “asking for higher return for additional duration as the Bangko

Sentral ng Pilipinas takes pause in its accommodative stance.”

BSP Gov. Benjamin Diokno earlier told Bloomberg TV that the Philippines’ monetary policy pause might be possible until the end of the year.

Despite this, De Leon said the Treasury still expected rates to remain steady with good volume of liquidity and preference for haven assets moving forward. INQ