DROP. The average rate the 12-year Treasury bond (T-bond) fell on Tuesday (Dec. 6, 2022), which National Treasurer Rosalia de Leon traced to investors' expectations that domestic inflation rate has peaked. The Philippine Statistics Authority (PSA) reported during the day another acceleration in domestic inflation rate last November to 8 percent, the highest since November 2008. (Photo courtesy of the BTr)
MANILA – The Bureau of the Treasury (BTr) fully awarded on Tuesday the 12-year Treasury bond (T-bond) due to strong demand and the decline in the debt paper’s key rate.
The average rate of the securities slipped to 7.189 percent from 8.168 percent previously.
The BTr offered the debt paper for PHP35 billion and tenders reached PHP79.44 billion.
“Full award with strong demand and significant decline in rates, with average mirroring secondary level even as November inflation settled at 8 percent,” National Treasurer Rosalia de Leon told journalists.
Domestic inflation rate further accelerated last November, the highest since November 2008, from the previous month’s 7.7 percent, the Philippine Statistics Authority (PSA) reported during the day.
Despite of this, de Leon said the rate of the T-bond declined on investors’ expectations that “inflation has peaked.”
She said statement by Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla of possible lower hikes in the central bank’s key rates contributed to the drop in the T-bond’s yield.
Medalla earlier said increases in the central bank’s key policy rates in the coming months are expected to be lower after the second 75 basis points increase last November, as inflation is expected to peak either this or next month.
He said rate hikes will remain data-dependent, citing the need to, among others, ensure price stability in the country and interest rate differential with the United States, with the Federal Reserve expected to sustain its rate hikes until inflation in the world’s largest economy return to the path towards the Fed’s 2 percent target. (PNA)
