The Bureau of the Treasury (BTr) partially awarded the 10-year treasury bonds at the auction on Tuesday as investors sought higher rates.
The average yield for securities with a remaining term of nine years and 10 months was capped at 6.428 percent, which the BTr attributed to “muted market demand and higher submitted bid rates.”
Under a full award, the rate would have been 6.432 percent. The comparable previous average was 6.226 percent, while the Bloomberg Valuation Service rate was 6.38 percent.
The auction was 1.8 times oversubscribed, with total tenders reaching P55.4 billion.
The BTr raised P27.6 billion out of the P30 billion offering.
This brings the total outstanding volume for the series to P367.6 billion.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, largely attributed the higher rate to the Israel-Iran war, which led to higher global crude oil prices, reaching 2.5-month highs, and a higher US dollar/peso exchange rate at 56.60 levels, the highest in nearly two months.
“Both of which could lead to some pickup in import prices and overall inflation; also amid still relatively higher comparable/benchmark 10-year US Treasury yields among 3.5-month highs recently at 4.44 percent, as the higher global crude oil prices since the renewed Israel-Iran war could lead to some pickup in inflation… and also due to recent US fiscal concerns over wider US budget deficits and higher US government debt amid Trump’s tax plan,” Ricafort said.
