Government awards P35 billion T-bonds at lower rate

Elijah Felice Rosales (The Philippine Star) - June 23, 2021 - 12:00am

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday awarded in full P35 billion worth of reissued five-year bonds in a display of investor preference for longer term assets.

The average rate of the Treasury bond (T-bond) declined by 53.4 basis points to 3.185 percent, from 3.719 percent in the previous auction.

The auction was nearly twice oversubscribed as total tenders amounted to P65.09 billion. The long-term debt papers will mature on May 4, 2027.

National Treasurer Rosalia de Leon said investors used up their returns to purchase securities with an extended maturity.

“(Investors are)recycling funds from redemptions. Markets are looking at yield pickup so (they) are looking (at) longer tenors,” she told reporters.

Likewise, De Leon confirmed that the BTr decided to auction an additional P5 billion in reissued T-bonds through the tap facility.

For June, the BTr eyes to widen its borrowing from the domestic debt market by more than 26 percent to P215 billion, from P170 billion in May and April.

As programmed, most of the local borrowing at P140 billion will be generated through T-bonds, while the remaining P70 billion will be raised through Treasury bills (T-bills).

Auctioned every Monday are P15 billion worth of T-bills divided into P5 billion with maturities of 91 days, 182 days and 364 days, while put up for sale every Tuesday are  P140 billion worth of T-bonds with tenors of 20 years, 10 years, seven years and five years.

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