The Bureau of the Treasury (BTr) made a partial award for the 20-year treasury bonds yesterday as it capped the rate for the government IOUs.
The auction was oversubscribed, with tenders of P28 billion. With the capped rate, the committee raised P12.2 billion of the P20 billion offering.
“The preference of most players is on the short term. The demand is healthy but it’s not as high as before,” Sharon Almanza, deputy treasurer, said after the auction at the BTr in Manila yesterday.
Almanza however said the committee opted to push for a partial award instead of rejecting bids as there are clients who still prefer the long-term securities.
“At least we awarded partially to accommodate those clients and at the same time, so that portion on the long will be repriced so at least it’s not that high,” Almanza said.
The rate of the bonds is 5.341 percent, 32.6 basis points (bps) higher than the previous yield of 5.015 percent.
“Relative to the previous auction, it rose a bit. The September auction we had rejected, it was about 5.356 percent so this one was slightly higher,” Almanza said.
“They opt to stay on the short-term given the uncertainty in the rates. The BSP (Bangko Sentral ng Pilipinas) governor said there might be another possible cut December but it will be data driven so depending on what the data will show in December, so there’s still a possible cut and also the uncertainty in the external factor, the trade war and all,” she added.