THE Bureau of the Treasury fully awarded P35-billion in reissued 7-year Treasury Bonds (T-bonds) on Tuesday’s auction as investor demand for government securities remained.
The tenor fetched an average rate of 3.678 percent, jumping by 14.9 basis points from 3.529 percent in the previous auction.
With a remaining term of 6 years and 11 months, the tenor is set to mature on April 22, 2028. It carries a coupon rate of 3.625 percent.
National Treasurer Rosalia V. De Leon said with markets still pricing inflation risks, the uptick in the average rate was expected.
Philippine Statistics Authority data revealed the country’s inflation rate in April remained from its March level of 4.5 percent, driven mainly by spikes in food prices and transportation. This rate was still higher than the 2.2 percent recorded in April 2020.
Monetary authorities last week said the inflation rate is now likely to average within the 2-to-4-percent target band for the year. The Bangko Sentral ng Pilipinas (BSP) downgraded its inflation forecast for this year to 3.9 percent from its previous projection of 4.2 percent in February.
The BSP attributed the downward revision to the impact of the lower tariff on imported pork and the lower-than-expected inflation for March and April.
Strong investor appetite marked the primary auction with total bids reaching P84.3 billion, more than double the P35-billion offer. The demand for government securities prompted the Treasury to open the tap facility for an additional P10-billion offering.
For this week, the Treasury has so far raised a total of P65 billion from selling government securities, including the P25 billion in T-Bills it awarded on Monday’s primary auction and the P5-billion in T-bills it also sold through tap facility auction on the same day.
For this month, the government aims to borrow a total of P170 billion from the local debt market, the same level it programmed to borrow in April.
The national government’s outstanding debt has reached a new record-high of P10.77 trillion as of end-March this year, up by 27.1 percent from P8.48 trillion a year ago.
The country aims to borrow a total of P3.03 trillion this year, roughly the same amount it borrowed last year.