MANILA — Coupon rate of Philippines’ freshly-auctioned 20-year Treasury bond (T-bond), which will be issued on Feb. 22, 2018, stood at 6.5 percent Tuesday.
The Bureau of the Treasury (BTr) offered the debt paper for PHP20 billion and was oversubscribed after tenders reached PHP22.766 billion.
However, the auction committee made a partial award of PHP8.853 billion after rate of the debt paper averaged at 6.414 percent, up from the 5.035 percent in the previous auction.
Finance Secretary Carlos Dominguez III told journalists after the auction that the partial award was made since the government did not need the money, pointing out that the auction was made also for rate setting.
He said the government was able to gain PHP255 billion when it issued retail treasury bond (RTB) in December 2017, which fetched an average rate of 4.625 percent.
“We hit that market for PHP255 billion before the rates went up so we saved money. So we don’t have to accept everything they give us,” he said.
Last January, the government issued USD2 billion worth of US dollar-denominated global bond and this boosted the government’s ability to fund its programs for this year.
National Treasurer Rosalia de Leon said the uptick in rates was in line with their expectations.
She said market participants expect three rate increases from both the Federal Reserve and the Bangko Sentral ng Pilipinas this year.
“It’s a new issue so there is liquidity premium,” she added. (Joann Villanueva/PNA)
