BTr raises P 35B from reissued 10-yr bonds

National Treasurer Rosalia de Leon / INQUIRER FILE PHOTO

The Bureau of the Treasury on Tuesday sold P35 billion in reissued 10-year bonds at a higher yield due to investor concerns over the US Fed’s looming tapering plus elevated inflation locally.

The Treasury fully awarded the securities at an average annual rate of 4.689 percent, up from 4.246 percent when the same bonds were offered two weeks ago.

“Rates moved in tandem with US treasuries now at 1.5 percent with taper signals,” National Treasurer Rosalia de Leon said.

Reports said the 10-year US treasury note touched on the higher 1.5-percent level for the first time in three months while the US Federal Reserve looked to cut back on asset purchases like bonds, or go on so-called tapering before this year ends.

Bid rates also moved up as the Bangko Sentral ng Pilipinas (BSP) jacked up its inflation forecasts, De Leon added.

Last week, the BSP said it expected the average rate of increase in prices of basic commodities to reach 4.4 percent this year from 4.1 percent previously, above its 2-4 percent target band. The BSP expects within-target headline inflation of 3.3 percent next year, although higher than the previous estimate of 3.1 percent.

In a report on Tuesday, the World Bank singled out the Philippines and Mongolia as the countries in the region where domestic inflationary pressures were high, unlike most of their neighbors.

Investors tendered P73.59 billion for the bonds maturing in July 2031, making the auction two times oversubscribed.

The Treasury opened its tap facility window to sell another P5 billion of the IOUs with a remaining life of nine years and nine months to the 11 government securities eligible dealers (GSEDs)-market makers.

To date, the Treasury raised a total of P152 billion from this bond series. INQ