THE Bureau of the Treasury raised P25.8 billion out of the P35 billion offering of new 3-year Treasury Bonds (T-Bonds) as investors sought higher yields after the government announced the pace of inflation for March quickened to 4 percent.
The security capped at an average rate of 4.21 percent and fetched a coupon rate of 4.25 percent.
Compared to the benchmark rate for the 3-year tenor of 4.055 percent, the average rate was higher by 15.5 basis points.
National Treasurer Rosalia V. De Leon said investors also factored in a possible rate hike from the Bangko Sentral ng Pilipinas (BSP) in the second half of this year.
“[The m]arket remains defensive with 4-percent inflation print for March” and BSP Governor Benjamin E. Diokno’s statement on rate action in the second half, De Leon told reporters after the auction.
The auction was oversubscribed, attracting P53.6 billion in total bids.
For this month, the Treasury programmed to raise P200 billion from the domestic debt market.
Since Monday this week, the Treasury has so far raised P40.8 billion out of its P50 billion offering so far.
Last month, the Treasury only raised P91.7 billion, more than a third of its P250-billion programmed offering as investors demanded higher bid rates amid Russia’s armed invasion of Ukraine and the hawkish signals from the US Federal Reserve.
This year, the government is set to borrow a total of P2.2 trillion, of which around 75 percent is expected to come from the domestic debt market.
As of end-January this year, the country’s outstanding debt has already hit a new record-high of P12.03 trillion as the country needed to borrow more to cover a wider budget deficit given higher government spending.
Image credits: Walter Eric Sy | Dreamstime.com