THE Philippines only raised P30.64 billion from its latest bond offering, according to the Bureau of the Treasury (BTr).
The 20-year bonds, which have a remaining life of 4 years and 10 months, initially intended to fetch P35 billion for the government.
National Treasurer Rosalia V. De Leon said the partial award reflected investors’ expectations that monetary authorities would decide in step with a hawkish US Federal Reserve.
“Average rate is still within secondary level with modest premium to account for illiquidity premium and expectation for point-by-point match rate hike by BSP [Bangko Sentral ng Pilipinas] with that of Fed,” De Leon said. “[It can be noted that] inflation has yet to peak with added pressure from supply constraints due to past typhoon damages.”
The bonds fetched an average annual interest rate of 7.131 percent while the low interest rate was at 6.8 percent while the high was pegged at 7.5 percent.
The BTr received tenders of P41.6 billion for the bonds and rejected P10.96 billion.
Last week, BSP Governor Felipe M. Medalla said that in light of the 75 basis points (bps) increase in US interest rates, the Monetary Board (MB) will match the Fed’s policy action in the MB’s upcoming policy rate setting on November 17. (Full story: https://businessmirror.com.ph/2022/11/03/bsp-to-increase-interest-rates-by-75bps/)
Socioeconomic Planning Secretary Arsenio M. Balisacan told the BusinessMirror that the MB’s action is necessary because not responding to the rate hike of the US Federal Reserve would be even more detrimental to the Philippine economy.
Meanwhile, expensive food items pushed the country’s inflation to its highest level since the rice price crisis 14 years ago and may continue doing so this month, according to the Philippine Statistics Authority (PSA).
PSA data showed inflation reached 7.7 percent in October, the highest since December 2008 when inflation hit 7.8 percent, which also coincided with the onset of the Global Financial Crisis. (Full story: https://businessmirror.com.ph/2022/11/04/food-prices-main-driver-of-october-inflation-of-7-7-a-14-year-high/)