MANILA — On expectations that interest rates will rise ahead of the Monetary Board’s policy meeting this week, the country’s yield on six-year Treasury bonds (T-bonds) went soaring yesterday.
The interest rate averaged at 3.511 percent, up 51.4 basis points from the average rate of 2.997 percent during the auction of the Bureau of Treasury.
The bonds went as high of 3.575 percent and a low of P3.35 percent as the issue attracted P48.945 billion worth of bids nearly doubling the the P25 billion on offer.
“We can afford to reject because we’re sitting on a mountain of cash and this is due to good cash management. We’re spending less for interest payments,” said National Treasurer Rosalia De Leon.
This was after they have decided to accept only P18.845 billion.
De Leon explained that before firming up its borrowing program, they still have to wait for the outcome of the US Federal Reserve’s meeting and the Bangko Sentral ng Pilipinas’ policy meeting.
“We haven’t really decided in terms of the tenor and volume. We need to see first if spending is going to accelerate. We may reduce depending on the outcome of the meeting,” she added.
Auctions are regularly conducted by the government to meet the expenditure needs of the country.
With reports from Zinnia Dela Pena