Government fully awards P30 billion T-bonds at higher rates

March 6, 2024 | 12:00am

MANILA, Philippines — The government secured P30 billion in long-term securities yesterday but at slightly higher rates after inflation picked up and ended four months of easing.

The Bureau of the Treasury fully awarded P30 billion for the reissued seven-year T-bonds with a remaining life of six years and 10 months in its first T-bond auction for March.

During the auction, the T-bonds fetched an average yield of 6.27 percent, 3.3 basis points higher than the reference rate of 6.237 percent. Rates went from a low of 6.198 percent and a high of 6.345 percent.

This was also above the coupon rate of 6.125 percent.

Similarly, this was 17.6 basis points higher in reference to the last auction of the same tenor on Jan.16.

Investors demanded for increased yields after inflation rose to 3.4 percent in February. It was the first time inflation picked up again in five months.

Following the February print, the Bangko Sentral ng Pilipinas said it is appropriate to keep monetary policy settings unchanged in the near term.

Further, demand for yesterday’s securities attracted P50.062 billion in bids, oversubscribing the auction by 1.67 times.

Bids dropped by 53 percent from the last seven-year auction where offers reached P107.095 billion. The latest offering has a maturity date of Jan. 18, 2031.

The Treasury aims to raise P180 billion from the domestic debt market. Of this, P120 billion is expected to come from T-bonds.