BTr raises P10 billion from 10-yr Treasury bonds

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday raised P10 billion from the issuance of 10-year Treasury bonds (T-bonds) amid healthy demand from institutional investors.

During yesterday’s auction, the BTr fully awarded the reissued T-bonds with a remaining life span of nine years and 11 months, resulting in an average rate of 6.213 percent, 2.9 basis points higher from the 6.184 percent recorded in the previous auction.

The auction met huge demand from investors with total tenders amounting to P17.278 billion.

National Treasurer Rosalia de Leon said the auction received good results due to strong demand from the market, particularly the institutional investors.

While the increase in rates has been moderate, De Leon acknowledged that rates are continuing to rise.

“We’ve had a lot of concerns like what happened in Syria. But then the steepening bias will continue given that inflation concerns is a persistent issue for our investors, particularly as we draw near the BSP meetings on May 10,” De Leon said.

“At the same time, we also see the new appointments in the Fed so they would have to be watchful in terms of what would be the pronouncements coming from the new members,” she said.

Meanwhile, De Leon said the government is not in a hurry to conduct a fund raising activity anytime soon to finance the redemption of P130 billion worth of securities maturing by May.

She said the government is prepared to cover the principal payments of the securities through the Bond Sinking Fund (BSF).

“It’s not urgent that we do it by May, because we already have the resources to meet out maturities come May 23, and even for other forthcoming maturities, that is already being taken cared of by our contribution to the BSF,” De Leon said.

She added the government is in a sound cash position following the issuance of P255 billion in retail treasury bonds in November last year.