The Bureau of the Treasury (BTr) has fully awarded the reissued 10-year treasury bonds auctioned yesterday even as rates rose amid inflation concerns.
Total tenders for the government securities, with remaining term of nine years and 10 months, amounted to P61.8 billion, nearly twice oversubscribed.
The auction committee raised the full program of P35 billion.
The IOUs fetched an average rate of 4.246 percent, 33.2 basis points higher than the previous average of 3.914 percent.
“Rates moved up with renewed inflation concerns, with August inflation print of 4.9 percent,” Rosalia de Leon, national treasurer, told reporters via Viber yesterday.
Bids ranged between 4.15 percent and 4.345 percent.
Amid healthy demand for the debt paper, the BTr opened the tap facility window for the same tenor for another P5 billion.
Inflation jumped to 4.9 percent in August from 4 percent the previous month, pushed by higher food and energy prices. This brings the year-to-date average to 4.4 percent.
PSA said the heavily-weighted food and non-alcoholic beverages rose by 6.5 percent during the month, from 4.9 percent in July 2021. The indices of Alcoholic beverages and tobacco, Clothing and footwear, Housing and other fuels and Transport also posted higher monthly increments.
Bangko Sentral ng Pilipinas said the latest outturn is consistent with their assessment that “inflation could settle close to the high end of the target range in the near term before decelerating back to within the target range by year end.”
BSP maintained that the risks to the inflation outlook remain broadly balanced over the policy horizon but the uptick in international commodity prices due to supply-chain bottlenecks and the recovery in global demand could lend upside pressures on inflation.
Analysts, meanwhile, said inflation will likely breach the 5-percent mark this month.
