The Bureau of the Treasury rejected all bids for the reissued 10-year Treasury Bonds (T-bonds) on Tuesday’s auction as expectations of steady policy rates throughout the year pushed the average rate up.
Nonetheless, the auction was oversubscribed as total tenders reached P44.507 billion, higher than the P30-billion offering.
National Treasurer Rosalia V. De Leon told reporters investor “appetite remains on the immediate part of the curve.” “[Investors] see policy rates will remain steady for the rest of the year,” De Leon said.
If the Treasury fully awarded the security with 9 years and 9 months to maturity, the average rate would have fetched 3.329 percent, 60.5 basis points higher than 2.724 percent in the previous auction. This is also higher than the secondary-market benchmark and trading rate for the security.
De Leon also announced that they are set to hold the “Premyo Bond” 3rd-Quarter Raffle Draw on Friday.
For this month, the Treasury is set to borrow a total of P160 billion from the local debt market this month. This is slightly lower than the P170 billion it programmed in August.
The government borrows to finance its spending requirements as well as to cover its budget deficit.
As tax collections are down amid the pandemic, the Development Budget Coordination Committee is projecting the country’s budget deficit to more than double to 9.6 percent of gross domestic product or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.