13-year T-bond rate drops

By Joann Villanueva

January 31, 2023, 8:46 pm

MANILA – The rate of the Bureau of the Treasury's (BTr) 13-year Treasury bond (T-bond) declined on Tuesday, sustaining the drop in government securities yield.

The average rate of the debt paper slipped to 6.197 percent from 7.182 percent during the auction last Jan. 10.

The BTr offered the securities for PHP35 billion and it attracted high volume of tenders amounting to PHP78.993 billion. The auction committee made a full award.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the latest rate of the 13-year debt paper is better for investors than the same tenor securities in the secondary market at 6.1552 percent as of Jan. 30, 2023.

He attributed the decline in the T-bond’s yield to expectations for sustained albeit lower hike in the Bangko Sentral ng Pilipinas’ (BSP) key rates next month.

He said expectations point to a possible 25 basis points increase in the BSP rates, which is seen to be affected by the forecast for the same adjustment in the Federal Reserve’s key rates by Feb. 1.

The projections for the continued but lower hike the Federal Reserve rates have been traced to the deceleration in US consumer price index (CPI). (PNA)