The Bureau of the Treasury (BTr) fully awarded the reissued Treasury bonds, seeing significant demand from investors during the auction yesterday.
This led the BTr to raise the full program of P30 billion.
The auction was 2.3 times oversubscribed, with total tenders reaching P67.6 billion, the BTr said.
The total outstanding volume for the series reached P323.6 billion.
With a remaining term of seven years and seven months, the reissued IOU fetched an average yield of 5.973 percent, marking a decline from its previous rate of 6.249 percent as well as current secondary market rate of 5.994 percent.
John Paolo Rivera, Philippine Institute for Development Studies senior research fellow, told Malaya Business Insight via Viber that investors may be pricing in anticipation of Bangko Sentral ng Pilipinas’ rate cuts later in the year, following the global trend in monetary easing.
“This encourages demand for longer-term securities as investors lock in higher yields before rates fall. A lower auction yield suggests investors are willing to accept slightly lower returns, possibly due to stable inflation and sufficient market liquidity,” Rivera said.
“Softer inflation expectations typically lead to lower yields. Even with a lower yield compared to the previous auction, real interest rates remain positive, making government bonds an appealing investment option for banks, pension funds, and institutional investors seeking low-risk environment,” he added.
Rivera said that given uncertainties in global markets, including geopolitical risks and US monetary policy, investors may be shifting towards safe-haven assets like government bonds, supporting demand.
