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PH T-bond rate up on high demand



Rate of the Philippines’ three-year Treasury bond (T-bond) rose Tuesday but the Bureau of the Treasury’s (BTr) auction committee made a full award on the back of strong demand for the debt paper.

It averaged at 4.632 percent, up from 4.256 percent during the auction last Jan. 23 but lower than the 5.2625 percent in the secondary market after the morning session on Tuesday.

BTr offered it for PHP10 billion and banks submitted a total of PHP20.006 billion worth of bids.

National Treasurer Rosalia de Leon said during the auction that they made a full award because the three-year paper seems to be “a happy spot for the market”.

She, however, noted that “inflation continues to be a persistent and a nagging concern for the market”.

In the first two months this year, rate of price increases averaged at 3.7 percent on the rebased 2012 index, within the government’s 2 percent to 4 percent target for 2017-2019.

However, the figure last February registered a big jump to 3.9 percent, the highest since September 2014, from the previous month’s 3.4 percent on account of faster inflation rate of the heavily-weighted food and non-alcoholic beverages index as well as the double-digit rise of the alcoholic beverages and tobacco index in line with the hike in sin taxes.

De Leon said the hike of debt papers’ rates in the past months can be attributed partly to concerns on the path of interest rates in the US as well as in the domestic market due to inflation developments, among others.

BTr will have weekly auctions for both the T-bonds and Treasury bills (T-bills) in the second quarter of this year unlike in the past quarter wherein it was held twice a month.

De Leon said this “leaves more room for us to accept” bids and more leeway for banks to offer more meaningful bids instead of offering bids that would be turned down by the auction committee because of high rates.

Joann Villanueva / PNA