PH’s 10-yr T-bond rate up Tuesday

By , on August 23, 2017


The T-bills auction was more than twice oversubscribed with total tenders reaching PHP32.3 billion. (Bureau of Treasury/Facebook)
National Treasurer Rosalia de Leon told reporters after the auction that strong demand for the debt paper, despite recent weakness of the local currency, was another factor for the full award of the T-bond. (Photo: Bureau of Treasury/Facebook)

MANILA  — Despite a hike in average rate, the Bureau of the Treasury’s (BTr) auction committee on Tuesday fully awarded the 10-year Treasury bonds (T–bond) worth PHP10 billion on back of strong demand for the debt paper.

Rate of the debt paper averaged at 4.718 percent, up from the 4.692 percent when it was first issued last June.

Its latest average rate, on the other hand, was lower than the 5.0379 percent in the secondary market Tuesday morning which, in turn, was part of the reason why the auction committee made a full award for the securities.

National Treasurer Rosalia de Leon told reporters after the auction that strong demand for the debt paper, despite recent weakness of the local currency, was another factor for the full award of the T-bond.

She cited Monday’s statement of Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. assuring that domestic fundamentals continue to buoy the peso.

“And then of course the very robust GDP (gross domestic product) growth for the second quarter at 6.5 (also helped),” she said.

Last week, the Philippine Statistics Authority (PSA) reported the slightly stronger growth of the domestic economy from quarter-ago’s 6.4 percent. The latest growth number is, however, lower than year-ago’s 7.1 percent.

De Leon said market’s visible interest on government-issued debt securities was also seen on interests in the proposed Marawi bonds, features of which are yet to be finalized.

The government is considering to issue around PHP30 billion worth of the proposed Marawi bond but details have yet to be announced pending studies on how much is really needed for the rehabilitation of Marawi City, which was destroyed by fighting between government troopers and the terrorist Maute Group.

De Leon said the government is firm on issuing this proposed retail securities “because we want to really demonstrate patriotism and solidarity for the rehabilitation of Marawi.”

She, on the other hand, discounted another issuance of Retail Treasury Bond (RTBs) this year, after selling PHP175 billion last March, if not for the proposed Marawi bond.

“Not anymore. We are having very good participation in the auctions and in the past except for the last one, the 20-year,” she said, referring to the auction of the 20-year T-bond last July 25.

BTr offered the debt paper for PHP15 billion but tenders only amounted to PHP11.202 billion, which the auction committee rejected.