Gov’t earns P25B from 3-yr T-bonds

MANILA, Philippines - The government earned P25 billion from the sale of three-year Treasury bonds.

The offer was oversubscribed by more than two times with bids reaching P53.53 billion.

The latest float is a reissue of the three-year debt paper awarded on May 22, 2014, which fetched an average interest rate of 2.75 percent.

With the re-issue, the yield fell by 24 basis points 2.51 percent.

Despite the oversubscription, the Bureau of Treasury’s auction committee decided to stick to the borrowing program and accepted only P25 billion worth of bids.

National Treasurer Rosalia V. De Leon said the accepted bids reflected the rates in the secondary market.

De Leon said the oversubscription is an indicator of investors’ strong preference for medium-term bonds.

She said the government remains awash with cash and that the market remains to be very liquid with the policy action being anticipated and reflected on the bids.

The Bangko Sentral ng Pilipinas is widely expected not to tweak its monetary policy until the end of the year to sustain economic growth amid easing inflation.

The Central Bank aims to keep inflation between three and five percent this year to stabilize prices to safeguard the purchasing power of consumers.

For next year, the government aims to lower inflation to two to four percent.