THE Bureau of the Treasury (BTr) awarded the full P15 billion on offer for the reissued 10-year Treasury bond (T-bond) placed on auction on Tuesday.
National Treasurer Rosalia V. de Leon said the auction committee decided to award the full P15 billion on offer as bid rates for the security fell within market estimates at 8.004 percent based on the Bloomberg Valuation Service (BVAL) rate that closed earlier in the day.
The reissued 10-year security received bids amounting to P28.306 billion at an average annual rate of 8.035 percent. This showed an increase of 168.5 basis points compared to the previous auction rate of 6.350 percent at an awarded P4 billion from the P10 billion on offer.
“In terms of the bids tendered, it was a very good volume given that [it’s] almost twice in the subscription. And then also it’s within the BVAL range so we accepted. It’s just showing that the market, more or less, [has] seen that inflation is stabilizing in terms of the inflation print this morning,” de Leon said.
The BVAL was launched last month, with the platform allowing for a more streamlined processing in line with trading and settlement operations for government securities.
“What’s more important is the month on month, from 0.9 percent to 0.3 percent, so it just shows that inflation momentum is decelerating. That’s also sending a signal to the market that we would expect that inflation would already trend downward,” she added.
On Tuesday the Philippine Statistics Authority (PSA) reported that, while the year-on-year headline inflation in October 2018 was steady at 6.7 percent, seasonally adjusted month-on-month inflation eased further to 0.3 percent. The country also registered a 6.7-percent inflation rate for September this year.
“So we see a very good participation and I think it’s really coming from the institutional investors because it’s already the end of the year, so they would really have to be doing the placements on their funds…. If they expect inflation to really trend downward, then they will lock in at this rate,” she said.
Realizing the spike in the prices of basic commodities, President Duterte in September issued Administrative Order 13, as well as Memorandum Orders 26 to 28, with measures easing nontariff barriers to help tame inflation and address supply-side constraints specifically on agricultural commodities.