INFLATION concerns pushed up the average rates on Tuesday’s auction of P35 billion in reissued 7-year Treasury Bonds (T-bonds).
Despite the uptick in the average rate, the Bureau of the Treasury still decided to fully award the T-bonds on offer.
With a remaining life of 6 years and 10 months, the tenor is set to mature on August 12, 2028. Its coupon rate stood at 3.75 percent.
The security fetched an average rate of 3.826 percent, higher by 3.7 basis points than the previous auction’s 3.789 percent.
As total bids submitted reached P76.13 billion, the auction ended up being more than twice oversubscribed. With a remaining life of 6 years and 10 months, the tenor is set to mature on August 12, 2028. Its coupon rate stood at 3.75 percent.
National Treasurer Rosalia V. De Leon said the “rates went up due to lingering concerns.”
The country’s inflation print for August surged to a 2-year-high of 4.9 percent. This is the highest since December 2018 when inflation was at 5.1 percent.
The Bangko Sentral ng Pilipinas (BSP) is set to hold its next monetary policy meeting on Thursday but economists expect the BSP to keep key rates unchanged.
De Leon said the auction committee also opened the tap facility for an additional P5-billion offering for government securities eligible dealers-market makers.
For this month, the Treasury is set to borrow a total of P250 billion from the local debt market, higher than the P200 billion program in August.
Broken down, P175 billion will be raised through auctioning off Treasury Bonds while the remaining P75 billion will be generated via the sale of T-bills.
This year, the national government plans to borrow a total of P3.1-trillion mainly from the local debt market.