National Treasurer Rosalia de Leon (File photo)
MANILA – The rate of seven-year Treasury bond (T-bond) rose Tuesday on the domestic inflation rate concerns, National Treasurer Rosalia de Leon said.
The average rate of the paper rose to 3.678 percent from 3.529 percent during the auction last April 20.
The Bureau of the Treasury (BTr) offered the debt paper for PHP35 billion and this was oversubscribed after total tenders reached PHP84.305 billion.
The auction committee fully awarded the debt paper.
“Market pricing still (has) inflation risk,” de Leon told journalists in a Viber message after the auction.
She said BTr opened its tap facility window to re-offer the same tenor for PHP10 billion to address the large demand for the securities.
De Leon earlier said inflation is among the factors that investors are weighing in vis-à-vis the government securities auctions.
Last week, the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) trimmed the central bank’s average inflation forecast for this year from 4.2 percent to 3.9 percent partly on the deceleration of rate of price increases last March and April and the impact of lower tariff on pork imports, with the latter as part of the government’s measures to address supply constraints on pork meat due to the African swine fever (ASF).
After hitting 4.7 percent last February, which is also the highest after the 5.1 percent in December 2018, domestic inflation slowed to 4.5 percent in March and April.
BSP officials expect inflation to remain elevated until the third quarter of this year, but average rates for this and next year are expected to remain within the government’s 2-4 percent target band until 2023.
BSP’s 2022 average inflation forecast is 3 percent, up from the previous forecast of 2.8 percent due to hikes in global oil prices. (PNA)
