MANILA – National Treasurer Rosalia de Leon on Wednesday said an increase in the country’s re-issued five-year Treasury bond (T-bond) is expected ahead of the Federal Reserve’s asset purchases tapering.
The average rate of the debt paper inched up to 3.762 percent from 3.576 percent during the auction last Oct. 12.
The Bureau of the Treasury (BTr) offered the securities for PHP35 billion and bids were higher at PHP46.648 billion.
The auction committee made a full award.
In a Viber message to journalists, de Leon said they did not open the tap facility to re-offer the same tenor during the day.
The rates of debt papers have been on the rise as inflation, both here and abroad, remain elevated as investors anticipate the Fed to start reducing its asset purchases and to tighten key rates given the improvement in the US economy.
“We expect higher rate submission(s) but we are in (a) good cash position for rejection,” de Leon said.
She remained optimistic that government securities would remain attractive amid inflation concerns.
“Statements from (Bangko Sentral ng Pilipinas) Gov. (Benjamin) Diokno and BSP provide assurance that inflation will be within target,” she added.
Monetary authorities expect inflation to remain elevated in the last quarter of the year given the upticks in global oil prices and the impact of weather-related factors on domestic food supply.
But they forecast a print of between 2 percent to 4 percent by the end of this year.
The average inflation in the first nine months this year stood at 4.5 percent.
Slower inflation of the transport index, among others, resulted in the deceleration of rate of price increases last September to 4.8 percent from 4.9 percent in the previous month, which is the highest since January 2019. (PNA)
