Government raises full P125 billion T-bond program

MANILA, Philippines — The government managed to borrow the entire P125 billion it programmed for the issuance of long-term securities this month, even as investors demanded slightly higher rates.

The Bureau of the Treasury yesterday fully awarded P25 billion for the reissued seven-year T-bonds on offer with a remaining life of six years and six months. This is the last T-bond auction for March.

This brought total T-bonds raised for the month to P125 billion, allowing the Treasury to raise its intended amount.

For the entire month, the Treasury made full awards for the five auctions set.

Rates were volatile during the month, rising by as much as 9.4 basis points, but also declining by up to 9.5 basis points.

During yesterday’s auction, the seven-year T-bonds fetched an average rate of 6.162 percent, up by 3.7 basis points from the 6.125 percent BVAL Reference Rate, the standard for securities.

Rates went from a low of 6.05 percent and a high of 6.2 percent.

The local debt market asked for higher yields after the central bank delivered a 25-basis-point rate hike last week.

Nonetheless, yesterday’s average rate was lower than the seven percent coupon rate when the T-bonds were first issued in October 2022.

At the time, the government raised only P24.125 billion out of the P35-billion target as rates soared to 6.943 percent.

It was reissued again last Jan. 4 with the Treasury awarding the full amount as rates went down to 6.796 percent.

Demand for yesterday’s securities attracted P46.862 billion, oversubscribing the auction by 1.87 times.

But bids dipped 38 percent during the last seven-year auction where offers reached P75.2 billion.

The latest offering has a maturity date of Oct. 13, 2029.