PH gov’t raises P30B from T-bonds auction

MANILA  -The national government raised P30 billion as planned through a full award of five-year Treasury bonds, with the average yield kept below prevailing rates at the secondary market.

These were re-issued 10-year T-bonds with five years and four months until maturity on Jan, 10, 2029.

At the auction on Aug 30, the average yield rose by 29.5 basis points (bps) to 6.22 percent from the 5.925 percent set in the previous re-issuance auction held last May 3. Still, the new average is lower than the original coupon rate of 6.875 percent set on its original issuance in January 2019

“The auction attracted P54.5 billion in total tenders, 1.8 times the P30 billion offer,” the BTr said in a statement. “With its decision, the (auction) committee raised P26.6 billion out of the P30 billion offering, bringing the total outstanding volume for the series to P325 billion,” it added.

Meanwhile, the Bloomberg Valuation Service pegged the rate on five-year corporate bonds at 6.257 percent or 3.7 bps higher than the auction average. Also, the rate on corresponding government securities was pegged at 6.254 percent or 3.4 bps higher.

In their latest monthly report, FMIC and UA&P Capital Market Research said Philippine 10-year bond yields were continuing to rise as the benchmark US 10-year T-bond yields trek higher.

The group said yields are trending upward as the United States Federal Reserve appeared not ready to end its policy rate hiking cycle.

“(Philippines) inflation, despite higher international prices of rice and crude oil, will continue to fall within the Bangko Sentral ng Pilipinas’ target range of 2 percent to 4 percent,” FMIC and UA&P said.

“The recent climb in domestic 10-year yields closer to 6.75 percent may not much leg to stand on, since real Philippine 10-year yields turned positive since June 2023 after being negative for 11 months before then,” they added.