The Bureau of the Treasury (BTr) made a partial award for the three-year treasury bonds sold yesterday as the auction committee capped rates for the government IOUs.
The government awarded just over half of the P30 billion offering for the reissued securities, at P16.586 billion.
Demand reached P37.346 billion.
The auction committee kept the rate at 4.014 percent, 27.2 basis points (bps) higher than the previous average of 3.742 percent.
Had a full award been made, the yield would have been 4.105 percent, 36.3 bps up from the previous rate.
Erwin Sta. Ana, deputy treasurer, said after the auction at the BTr office in Manila the investors are considering several factors, which include the inflation rate for December at 2.5 percent and the developing geopolitical tension in the Middle East.
“We felt that the market is still at a ‘wait-and-see’ at this time, considering that these are developing as we speak, hence the turnout,” Sta. Ana said.
“And this is despite of the announcement from (Bangko Sentral ng Pilipinas) Governor (Benjamin) Diokno for 25 bps cut so maybe inflation expectations would come into play, but that’s the wait and see (approach),” he added.
The auction committee also made a partial award for the 364-day paper auctioned last Monday while full awards were granted for the 91-day and 182-day IOUs.
“We considered several factors and one of which is the performance of the security in today’s secondary market, so that’s one input there,” Sta. Ana said.
“While we feel that the market is still digesting the inflation trend and the other developments that I mentioned, looks like they are holding off from bidding aggressively for this particular auction,” he added.