MANILA -- The Bureau of the Treasury’s (BTr) auction committee on Tuesday made a partial award for the seven-year Treasury bond (T-bond) amid the spike in interest rates.
The rate of the debt paper rose by 110.9 basis points to 7.085 percent from 5.976 percent previously.
Deputy Treasurer Erwin Sta. Ana traced its uptick to the total 100 basis points increase in the Bangko Sentral ng Pilipinas’ (BSP) key rates to date.
“We just took into account those increase so that’s why we came up with a reasonable cut of rate. We run internal simulation as well and we think that average rate is still acceptable for the Treasury and the auction committee as well,” he said.
The auction committee awarded PHP5.73 billion-worth of debt paper, a little more than one-third of the PHP15 billion offering.
Total tenders are below the offering, amounting only to PHP13.88 billion.
Sta. Ana said that since there have been several increases in the BSP rates, investors have also been asking for higher yields, which constrained the auction committee to reject some tenders in recent weeks.
“We haven’t been awarding on the bonds space so I think we came into a consensus that, okay, we should award this time,” he said.
Meanwhile, Sta. Ana said the plan to issue another US dollar-denominated bond this year “is still on the table.”
“We are closely looking at that space this fourth quarter,” he said.
Earlier, National Treasurer Rosalia de Leon said the government is considering to issue as much as USD1.5-billion-worth of dollar bond, otherwise known as the Republic of the Philippines (ROP) bond, before the end of this year.
She said they are still considering the tenor and timing of the planned issuance.
If the planned dollar-denominated issuance pushes through, it would be the second for the government this year after the 10-year dollar-denominated ROP bond issuance last January.
It will also be the fourth in terms of foreign borrowing for the government after the 1.46 billion renminbi-denominated three-year Panda bond issuance last March and the multi-year 154.2 billion Japanese yen Samurai bond last week. (PNA)
