Treasury sells P22.7 billion T-bonds on partial award

MANILA, Philippines — The government managed to raise P22.7 billion in a fresh issuance of long-term securities as rates picked up after the peso slid to an almost two-year low.

The Bureau of the Treasury partially awarded P22.717 billion out of the P30 billion for the original issue of 20-year T-bonds.

During yesterday’s auction, the 20-year T-bonds fetched an average rate of 6.797 percent, up by 12.5 basis points from the 6.672 percent BVAL Reference Rate, which is the standard for securities.

Rates went from a low of 6.6 percent and a high of 6.95 percent. The coupon rate is set at 6.875 percent.

This came after the peso touched the P58-per-dollar level for the first time since November 2022.

It should be noted that a weaker peso would translate to higher debt servicing for the government.

Nonetheless, yesterday’s average rate was lower than the 7.017 percent during the last 20-year T-bond auction on April 23.

At the time, the government also partially awarded, but at a lower amount of just P16.633 billion.

Demand for yesterday’s securities only attracted P37.919 billion bids, barely oversubscribing the auction by 1.26 times.

Bids went up by nine percent from the last 20-year auction where offers reached P34.927 billion.

The latest offering has a maturity date of May 23, 2044.  For May, the Treasury targets to borrow P210 billion from domestic creditors.

Of this, P150 billion is expected to come from long-term T-bonds. It has so far raised P91.693 billion.