THE Bureau of the Treasury (BTr) awarded the full P15 billion on offer for the seven-year reissued Treasury bonds (T-bonds) on Tuesday, with the auction committee opening its tap facility anew to accommodate the oversubscription.
National Treasurer Rosalia V. de Leon said the auction committee decided to fully award the reissued T-bonds, seeing strong liquidity from the local market as bids reached as much as
P29.920 billion.
The committee awarded the bonds on offer at an average annual rate of 7.090 percent—an increase of 11.6 basis points compared to the 6.974-percent rate set in the previous auction for the IOU.
The strong demand coming in from local investors prompted the BTr to open its tap facility anew, marking the fourth time this year the BTr used this facility.
“It’s like we also did an RTB [retail Treasury bond issuance], and it’s good because we’re even getting longer [maturity],” de Leon said. “We have the option to upsize the amount offered. They’re really locking in the rates, anticipating that next year, eventually, inflation would be tapering off.”
At the previous auction for the seven-year T-bonds on November 27, the auction committee received tenders amounting to P62.227 billion, with the BTr also awarding the full P15 billion on offer at an average annual rate of 6.974 percent.
The BTr also opened its tap facility at that auction. To note, the BTr awarded P15 billion for five-year T-bonds during the first time it opened the facility this year.
“So far, it’s P15 billion, P15 billion, P23 billion; plus whatever we award today,” de Leon said. “It’s like we also issued an RTB. And its maturity is longer.”
The third time the tap facility was opened, de Leon said the BTr had the discretion to cap the awarded amount at a level the bureau deems fit. Previously, the awarded amount under the tap facility was only based on the same amount awarded during the auction for the security before opening the tap facility on the same day.
The Treasury’s 10 market makers are the only ones that can access the tap facility, which was open from 2 p.m. to 4 p.m. on Tuesday. The tap facility allows Government Securities Eligible Dealers to access bonds after the initial primary auction.
The 10 market makers are BDO Unibank Inc., Bank of the Philippine Islands, China Banking Corp., Citibank Philippines, Development Bank of the Philippines, First Metro Investment Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Rizal Commercial Banking Corp. and Security Bank Corp.