MANILA -- Rate of the Philippines’ 10-year Treasury bond (T-bond) fell by 144.8 basis points to 4.196 percent on Tuesday on expectations for more reductions in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates.
The tenor fetched an average rate of 5.644 percent during the auction last May 28, while the rate in the secondary market on Tuesday morning was higher at 4.372 percent.
National Treasurer Rosalia de Leon told journalists that the auction committee already expected the auction’s results due partly to statements by BSP Governor Benjamin Diokno that more rate cuts are in the offing.
During the meeting of the BSP’s policy-making Monetary Board (MB) last August 8, the Board reduced by 25 basis points the central bank’s key rates effective the following day.
The cut was made after the same level of reduction last May, both of which was due to continued deceleration of domestic inflation rate and assessments that domestic growth remains firm despite the weaker output in the first half of the year.
De Leon said investors also took note of Diokno’s statement of further cuts in banks’ reserve requirement ratio (RRR) after a total of 200 basis points reduction from May to July this year.
“There's also the flight to safe haven coming from what’s happening (overseas like the) escalation of trade disputes between (the) US and China (and) of course (on) what’s happening with Argentina,” she said.
Another concern among investors is the growth outlook on the global economy, she added.
On the domestic front, De Leon further said investors are taking advantage of current opportunities to lock in gains ahead of the expected decline of interest rates. (PNA)
