MANILA -- The Bureau of the Treasury (BTr) on Tuesday partially awarded the five-year Treasury bond (T-bond) as investors continue to ask for high yields.
The average rate of the debt paper rose to 7.342 percent, higher than the 5.902 percent it fetched during the auction last August 14. “Obviously the bids came in a little higher than what we’ve expected,” Deputy Treasurer Erwin Sta. Ana told reporters after the auction.
BTr offered the securities for PHP15 billion but awarded only PHP9.74 billion. Total tenders amounted to PHP15.730 billion.
Domestic interest rates are on the rise, which Sta. Ana traced to the rise of the country’s inflation rate. The BTr official, however, said that if investors consider that inflation may have peaked last September at 6.7 percent “then we could assume that interest rates will follow the same trajectory.”
“So we can not say for sure now where will interest rates will go but we’ve always played it at a market phase,” he said.
Meanwhile, National Treasurer Rosalia de Leon on Monday said the results of Tuesday’s T-bond auction will be the base of any decision for the possible issuance of retail treasury bond (RTB) in the last quarter of the year.
Sta. Ana said the size of the possible RTB issuance depends on the remaining balance of the financing program and how much has been raised to date. “We have to balance it out on how fast the phase of disbursement...We can’t pin down the number yet until we have those information,” he said.
The tenor and date of the possible issuance are also still being mulled upon, he said. “We have to know where market is within the fourth quarter. Of course, we have to look at the liquidity conditions...But its possible for the fourth quarter,” he added. (PNA)
