By Joann Villanueva/PNA
MANILA — The rate of the Philippines’ five-year Treasury bond (T-bond) fell by 34 basis points Wednesday, attracting a large amount of bids, which in-turn prompted the auction committee to make a full award.
Average rate of the debt paper declined to 7.003 percent from 7.342 percent it fetched during the auction last October 9.
BTr offered it for PHP15 billion and tenders reached more than three times at PHP48.857 billion.
National Treasurer Rosalia De Leon cited the strong demand for the debt paper, which, she said, may be due to investors locking in on rates on the back of expectations that inflation may have already reached its peak for this year at 6.7 percent last September and October.
She also cited the possibility that investors are taking advantage of this issuance, which comes at the latter part of the year.
With the strong demand for the debt paper, the BTr opened a tap facility for the same tenor to give more investors the chance to get the same yield, which she said is a reasonable level.
Meanwhile, De Leon said they signed a Memorandum of Understanding (MOU) with the Bank of China (BoC) for the issuance of 6 billion renminbi-worth of Panda bond in the next two years.
She said they can either choose to issue the full amount in one tranche or on a staggered basis, depending on market appetite and the government’s requirements.
The Philippines issued its first-ever Panda bond last March, with the amount at 1.46 million renminbi.
The issuance was made as the government continues to diversify its portfolio to take full advantage of investors’ positive sentiment about the domestic economy.
