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THE
Bureau of Treasury on Tuesday awarded P1.45 billion
worth of five-year bonds at a yield of 7.099 percent.
The debt
paper was nearly twice oversubscribed with total tenders
of P13.460 billion on a P7-billion offer.
“Even
though we gave a strong cash position, we are just
providing supply and support to the market,” Finance
Undersecretary Roberto Tan said after the auction.
The
five-year bond was last offered in July at a coupon rate
of 8.875 percent.
Tan said
the yield curve leans on shorter-term debt instruments
with an “uptick” on 10-year to 20-year bonds.
The
Monetary Board of the central bank is set to meet on
Thursday to determine if interest rates should again be
raised.
“We’re
not trying to predict what’s going to happen with
interest rates. Of course, the Monetary Board meeting on
Thursday will have an impact,” Tan said.
A bond
trader from a commercial bank said the market is
anticipating an increase of 25 basis points to 75 basis
points from the Monetary Board.
“Based
on the interest movement, we might see demand on short
term because inflation is still high and is still
expected to peak in October, and also because of
increased supply in government securities,” the trader
said.
“The
driver is liquidity in the sense that banks will channel
their funds to government securities,” the trader added.
The
trader said the market is looking at the possibility of
a less aggressive rate hike by the Bangko Sentral ng
Pilipinas since the meeting will coincide with the
expected release of the national government’s
second-quarter gross domestic product data, which it
expects to be slower.
“If so,
the government will not raise interest rates
aggressively,” the trader said. |
