Government borrows P25 billion from T-bonds

MANILA, Philippines — The government managed to borrow P25 billion from the issuance of long-term securities at higher rates even after inflation sustained its downward trend.

The Bureau of the Treasury yesterday fully awarded P25 billion for the reissued 10-year T-bond with a remaining life of four years and nine months.

During yesterday’s auction, the five-year T-bonds fetched an average rate of 5.805 percent, moving up by 7.8 basis points from the 5.727 percent BVAL Reference Rate, which is the standard for securities.

Rates went from a low of 5.7 percent and a high of 5.85 percent.

Yields demanded by investors were a little higher even after inflation declined for the fourth straight month at 6.1 percent.

This, as the market continues to anticipate the next move of the US Federal Reserve, as well as the Bangko Sentral ng Pilipinas this month.

Nonetheless, yesterday’s average rate was lower than the 6.25 percent coupon rate when the T-bonds were first issued last March 2018.

Likewise, the yield was below the 6.568 percent rate during the last five-year T-bond auction on Nov. 29.

At that time, the government only awarded P22.97 billion out of the P35 billion on offer.

Demand for yesterday’s securities attracted P41.742 billion bids, oversubscribing the auction by 1.67 times.

Bids declined by almost 40 percent from the last five-year auction where offers reached P65.514 billion.

The latest offering has a maturity date of March 22, 2028.

For June, the Treasury targets to raise P185 billion from the debt market. A total of P125 billion is targeted to be borrowed from long-term debt papers.

The Treasury has so far raised P50 billion.