MANILA – The Bureau of the Treasury (BTr) fully awarded a fresh issuance of PHP35 billion 10-year Treasury bond (T-bond) on Tuesday following the high demand for the debt paper amidst the uptick in its coupon rate.
The coupon rate of the T-bond, which will be issued this January 20, is 4.875 percent higher than the 4 percent the same tenor fetched during an auction on July 21, 2021.
The average rate of the debt paper stood at 4.831 percent, lower than the 4.8795 percent in the secondary market on Monday’s trading.
BTr’s last award for the same tenor was on Nov. 9, 2021 and the paper fetched an average rate of 5.130 percent.
Total tenders for the T-bond during the day are more than twice the offer volume at PHP72.24 billion.
In a Viber message to journalists, National Treasurer Rosalia de Leon said while the coupon rate of the debt paper rose compared to its July 2021 level, its interest rate remained below the secondary market level.
She cited the large volume of bids submitted during the auction.
“(This) defied fears of Fed (Federal Reserve) multiple increases,” she said, referring to expectations of hikes in the Fed’s policy rates as early as March this year.
De Leon said that in the original issuance of the same tenor in July last year, “liquidity premium is normally incorporated in rate.”
“But (it is) not (the) case here,” she said.
De Leon attributed the somewhat fearless stance of investors to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno’s “assuaging market (that) he won’t hike (the central bank’s key policy rates) until (the) economy (is) on solid recovery path.”
”And (that) they need to deploy liquidity. Inflation concerns have also eased,” she added. (PNA)
