By Aaron Michael C. Sy, Reporter

THE GOVERNMENT raised an initial P135 billion from the offering of its new 10-year fixed-rate Treasury notes it auctioned off on Tuesday under a new issuance format targeting institutional investors.

The amount raised was more than four times the initial P30-billion offering, as tenders reached P197.3 billion, the Bureau of the Treasury (BTr) said in a statement after the auction.

The new Treasury bonds (T-bonds) fetched a coupon rate of 6.375%, resulting in an average rate of 6.286%, results of the rate-setting auction posted on the Treasury’s website showed.

Accepted bid yields ranged from 6% to 6.4%.

The coupon rate was 10.37 basis points (bps) higher than the 6.2713% seen for the 10-year notes based on PHP Bloomberg Valuation Service Reference Rates data as of April 15 published on the Philippine Dealing System’s website before the auction.

The BTr will continue to offer the notes to qualified dealers until April 24 at a minimum investment of P10 million and increments of P1 million after.

The issue date for the notes maturing in 2035 is scheduled for April 28.

“The extended offer period will allow for a larger volume than our regular auction. Thus, it will ensure liquidity,” National Treasurer Sharon P. Almanza said in a Viber message.

The Treasury said the extended offer period is a first for a nonretail bond issuance, as it “seeks to establish a new avenue for building liquid benchmarks.”

“Demand was strong. Investors are looking to [buy] as inflation is low, which could lead to more rate cuts, so the rate was good to buy,” a trader said by phone.

The trader added that the coupon rate was within market expectations as it was at similar levels as secondary market rates.

The Monetary Board resumed its easing cycle last week, lowering the target reverse repurchase rate by 25 bps to 5.5%. Rates on the overnight deposit and lending facilities were also cut to 5% and 6%, respectively.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. said expectations of easing inflation support the shift to a more accommodative monetary policy stance, adding that they are considering further rate cuts this year in “baby steps” of 25 bps at a time.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the coupon rate also matched the 10-year US Treasury yield which has been elevated lately due to the Trump administration’s tariff policies.

“I think the volume is good for BTr as it provides them cushion. We think this is close to their target volume. This puts less pressure on the shorter tenors, especially for five years and below,” another trader said in a text message.

The BTr could raise up to P200 billion from this offering to match the maturities this month at around P170 billion, and ahead of jumbo maturities in August, the trader added.

Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LANDBANK) are the joint lead issue managers, with BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp., PNB Capital and Investment Corp., and Security Bank Capital Investment Corp. as joint issue managers.

Qualified dealers for the new bonds include Asia United Bank, BDO Capital and Investment Corp., BDO Unibank, Inc., BPI Capital Corp., China Banking Corp., Citibank NA, CTBC Bank (Philippines) Corp., DBP, Deutsche Bank AG, East West Banking Corp., The Hong Kong and Shanghai Banking Corp. Ltd., ING Bank NV, Maybank Philippines, Inc., Metropolitan Bank & Trust Co., Bank of Commerce, Philippine National Bank, Rizal Commercial Banking Corp., Standard Chartered Bank, Security Bank Corp., LANDBANK, and Union Bank of the Philippines, Inc.

The Treasury is looking to raise P245 billion from the domestic market this month — P125 billion via T-bills and P120 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion this year.