MANILA – The rate of the Philippines’ seven-year Treasury bond (T-bond) rose Tuesday, which National Treasurer Rosalia de Leon traced to a similar trend in the secondary market due to the elevated inflation rate.
The average rate of the debt paper inched up to 3.732 percent from 2.719 percent during the auction of the same tenor last January.
The Bureau of the Treasury (BTr) offered it for PHP30 billion and the auction committee made a full award.
Total tenders amounted to PHP50.248 billion.
“Rates (increased as) expected as secondary levels climbed in tandem with inflation, higher oil prices, and US Treasuries with optimism on (the) stimulus package,” de Leon told journalists in a Viber message.
The domestic inflation rate is on the rise, with the February level rising for the fifth consecutive month at its 26-month high of 4.7 percent due to supply constraints on some food items like pork due to the African swine fever, and the rise of oil prices in the international market.
Monetary authorities expect the elevated inflation rate to continue until the second or third quarter of the year.
The average inflation for this year is projected at 4.3 percent, higher than the government’s 2-4 percent target band until 2023. (PNA)
