RISE. The average rate of five-year Treasury bond (T-bond) rose on Tuesday (Nov. 8, 2022), which National Treasurer Rosalia de Leon traced to continued hike expectations from central banks of the Philippines and the US. Amidst the rate uptick, the Bureau of the Treasury (BTr) partially awarded the debt paper. (Photo courtesy of the BTr)

MANILA – The rate of five-year Treasury bond (T-bond) rose on Tuesday but the auction committee partially awarded the debt paper.

The average rate of the securities inched up to 7.131 percent from 5.772 percent previously.

The Bureau of the Treasury (BTr) offered the T-bond for PHP35 billion and tenders reached PHP41.6 billion. The auction committee awarded PHP30.64 billion.

“Average rate is still within secondary level with modest premium to account for illiquidity premium and expectation for point by point match rate hike by BSP (Bangko Sentral ng Pilipinas) with that of Fed (Federal Reserve), noting (that) inflation has yet to peak with added pressure from supply constraints due to past typhoon damages,” National Treasurer Rosalia de Leon told journalists in a Viber message.

Last week, the Fed again increased its key rates by 75 basis points, after noting the continued elevated inflation rate in the world’s largest economy.

The Federal Reserve funds rates are targeted to remain on the rise in a bid to bring down US inflation rate to the Fed’s 2 percent target.

BSP Governor Felipe Medalla said they will also increase the BSP’s key rates by the same amount during the rate setting meeting of the policy-making Monetary Board (MB) on Nov. 17 to ensure adequate interest rate differential with the US. (PNA)