THE Bureau of the Treasury only granted a partial award of the reissued 5-year Treasury Bonds (T-Bonds) the BTr offered last Tuesday.
With its decision, the Treasury raised P22.1 billion out of its P35-billion offering. The security was awarded at an average rate of 4.012 percent.
Had the Treasury opted to fully award the offer, the highest submitted bid rate would have reached 4.15 percent, way above the fair value for the security, officials said.
With a remaining life of four years and two months, the tenor is set to mature on April 8, 2026. Its coupon rate is set at 3.375 percent.
Tenders for the security reached P58.3 billion, making the auction oversubscribed.
The BTr’s decision in Tuesday’s auction hinged on expectations prices would remain mute in the coming months.
National Treasurer Rosalia V. De Leon expressed confidence the country’s inflation rate will continue to go down.
“Inflation will trend downward and [the] BSP [Bangko Sentral ng Pilipinas] patiently supportive to allow [the] economy to recover,” De Leon told reporters following the auction.
In December, monthly inflation eased to its lowest for 2021 at 3.6 percent due to cheaper food and transport costs.
However, the country’s average consumer prices for 2021 settled at 4.5 percent, which is above the government’s 2-percent to 4-percent target. This is also higher compared to 2.6 percent in 2020.
Factors cited by economists that contributed to the country missing its full-year inflation target include higher pork prices, continued supply chain constraints, and fourth-quarter spending surge.
For this month, the Treasury is set to borrow P200 billion from the local debt market.
For this year, the national government programmed to borrow P2.47 trillion, down by nearly a fifth from P3.07 trillion this year.
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