THE Bureau of the Treasury (BTr) fully awarded the reissued 20-year Treasury bonds at Tuesday’s auction, with demand reaching 1.6 times the offered amount.
Total tenders for the IOUs reached P39.1 billion, prompting the BTr to raise the program to P25 billion.
This brings the total outstanding volume for the series to P167.7 billion.
With a remaining term of 19 years and three months, the government securities fetched an average yield of 6.376 percent.
This is higher than the comparable Bloomberg Valuation Service rate of 6.349 percent, and the previous average of 6.095 percent.
“The last auction for this bond was held in November last year. Since then, bond yields have moved higher following adjustments in the Bangko Sentral ng Pilipinas’ policy outlook given global trade policy uncertainties and upside risks to inflation,” Chelsea Vanessa Lim, fixed income portfolio manager at Sun Life, said in an email.
“The auction results reflect the market’s tepid appetite for duration. We continue to expect bonds with 10Y tenor to be favored in the current market environment,” she added.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the auction yield was also higher, with demand relatively lower than the other treasury bonds with shorter tenors seen in previous weeks.
“This reflects lower appetite on long-dated T-bonds amid uncertainties on Trump’s protectionist measures that could lead to higher US inflation and, in turn, to fewer Fed rate cuts,” Ricafort said.
