THE Bureau of the Treasury raised P35 billion from auctioning off P35 billion in reissued five-year Treasury Bonds (T-bonds).
Bids for the government papers were oversubscribed after hitting P56.1 billion.
With a remaining life of four years and five months to maturity, the T-bonds fetched an average rate of 3.576 percent, higher by 5.58 basis points from the secondary market rate of 3.5202 percent based on the Bloomberg Valuation Service reference rate for a 5-year tenor.
In the previous auction of the security last September 1, the tenor fetched an average rate of 2.746 percent. However, National Treasurer Rosalia V. De Leon said the new average rate should not be compared with the average of the previous auction “when inflation was low.”
Inflation eased to 4.8 percent in September, slightly lower than 4.9 percent in August but within the range of the central bank’s projection for September inflation of 4.8 percent to 5.6 percent. The Bangko Sentral ng Pilipinas (BSP) earlier set full-year inflation at the 2-percent to 4-percent range. However, the forecast was revised slightly upward to 4.1 percent.
De Leon has said the Treasury expects investors would seek higher rates after the tweaking of inflation targets.
The increase in rates comes as the Treasury aims to raise P200 billion from the local debt market. The latter is seen as the major source of the national government’s programmed borrowing of P3.1 trillion.
As of end-August this year, the national government’s outstanding debt has hit a new record-high of P11.64 trillion, up by more than a fifth from P9.62 trillion a year ago.