Government borrows P20 billion from T-bonds at lower rates

MANILA, Philippines — The government borrowed P20 billion in long-term securities after demand surged and investors sought lower rates.

The Bureau of the Treasury yesterday fully awarded P20 billion for the reissued 20-year T-bonds with a remaining life of 15 years and two months.

During yesterday’s auction, the 15-year T-bonds fetched an average rate of 6.593 percent, dropping by 18.4 basis points from the 6.777 percent BVAL Reference Rate, which is the standard for securities.

Rates went from a low of 6.483 percent and a high of just 6.65 percent.

Yesterday’s average rate was also lower than the 6.75 percent coupon rate when the T-bonds were first issued in January 2019.

It was likewise lower than the 6.927 percent rate during the last 15-year T-bond auction on Aug. 23.

At that time, the government rejected all bids and did not award any amount.

Demand doubled to P71.303 billion from the last 15-year auction where offers only reached P35.302 billion.

The auction was oversubscribed by 3.565 times. The latest offering has a maturity date of Jan. 24, 2039.

For this month, the Treasury aims to borrow P200 billion from domestic creditors, which was revised downward from the original target of P225 billion due to the issuance of the maiden tokenized T-bonds.

Of this, P140 billion is expected to come from T-bonds. It has so far raised P80 billion.