THE Bureau of the Treasury (BTr) on Tuesday fully awarded P30 billion in new 10-year Treasury Bonds (T-bonds) despite its coupon rate crashing by 400 basis points to 2.875 percent. The last new 10-year bond issued in January last year had a coupon rate of 6.875 percent.
National Treasurer Rosalia V. De Leon told reporters the market is still awash with liquidity and inflation remains benign at 2.5 percent.
Headline inflation in June quickened to 2.5 percent after four months of deceleration, according to the Philippine Statistics Authority’s report on Tuesday. In May, inflation was slower at 2.1 percent.
Meanwhile, the auction attracted total tenders of P59.7 billion, almost twice the P30-billion offer.
Originally, the Treasury scheduled to auction 7-year T-bonds on Tuesday but later on changed to 10-year tenor as De Leon said they saw investors wanting “more yields since rates [were] super low.”
“Results speak for itself,” she told the BusinessMirror.
For this week, the Treasury raised a total of P54 billion from its sale of Treasury Bills (T-bills) and T-bonds.
On Monday, the Treasury upsized the volume of T-bills it awarded to P24 billion, higher than the initial P20-billion offering.
For this month, the Treasury has programmed to borrow P205 billion, bigger than P170 billion it programmed in June.
Malacañang also announced on Monday that the BTr will be offering a new batch of Retail Treasury Bonds (RTBs) on July 15.
However, De Leon told reporters the auction has been moved to July 16.
While the Treasury has yet to announce further details about the new RTB issuance, De Leon said earlier that proceeds from this year’s second RTB issuance will go to the country’s budgetary support.
Prior to lockdown measures as Covid-19 pandemic hit the Philippines, the Treasury was able to raise P310.8 billion in 3-year T-bonds in a one-week offer period that started on January 28 and ended on February 4.
RTBs are generally considered low risk for investors as these allow them to earn on a fixed interest based on prevailing market rates and are paid quarterly during the term of the bond.
For minimum denominations of P5,000, the general investing public was given the chance to take advantage of the issuance during the offer period.