Treasury rejects 5-year bond bids

By Czeriza Valencia

THE Bureau of Treasury yesterday rejected all bids for the reissued five-year Treasury bonds worth P7 billion after banks posted high rates because of inflationary pressures.

The debt paper would have fetched 8.818 percent on average against the secondary market rate of 8.971 percent had the government awarded it in full. The bureau received total tenders of P10.207 billion.

The five-year bond fetched an average of 8.495 percent when last auctioned on June 3.

“Bids are high because of inflation. That’s what caused the rejection,” Finance Undersecretary Roberto Tan told reporters after the auction.

A bond trader in Manila said the market is “factoring in inflation.”  

“With June inflation expected to rise 10 [percent] to 11 percent, we would really go on defensive bidding. With high inflation, interest rates are

also expected to rise,” the trader said.

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Treasury rejects 5-year bond bids

THE Bureau of Treasury yesterday rejected all bids for the reissued five-year Treasury bonds worth P7 billion after banks posted high rates because of inflationary pressures.

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