Treasury partially awards P22.85 billion in T-bonds

MANILA, Philippines — The government only made a partial award of Treasury bonds (T-bonds) as yields remain high with the September inflation expected to further increase.

The Bureau of the Treasury yesterday partially awarded P22.85 billion worth of reissued three-year T-bonds out of the P35 billion on offer.

The T-bonds fetched an average yield of 5.746 percent from a low of 5.375 percent and a high of 5.87 percent.

The average rate was close to the original coupon rate of 5.75 percent when the T-bonds were first issued in 2018. The security has a remaining life of two years and six months.

Yesterday’s average yield was 44.8 basis points higher than secondary market rates of 5.298 to 5.551 percent for the three-year bond.

National treasurer Rosalia de Leon said the local debt market continues to provide cushion as high inflation remains persistent.

The Philippine Statistics Authority will release today the headline inflation data for September with a market consensus of 6.7 percent.

Inflation stood at 6.3 percent print in August. The 6.7 percent target for September is at the lower end of the Bangko Sentral ng Pilipinas’ expectation of 6.6 to 7.4 percent.

“That being the case, BSP is expected to deliver another rate increase,” de Leon said.

Last month, the central bank delivered a 50-basis-point rate increase, effectively bringing the benchmark rate to a three-year high of 4.25 percent.

Meanwhile, the latest T-bonds yield was also higher than the 5.592 percent rate fetched during the closest long-term government security auction for a four-year bond last Sept.6.

Demand for the securities attracted P39.144 billion, oversubscribing the auction by 1.12 times. Such a demand is below the previous week T-bonds on offer that reached P49.985 billion.

This month, the government targets to secure P200 billion from the domestic debt market. Of this, P140 billion will come from long-term debt securities.