By Ronnel W. Domingo | Philippine Daily Inquirer
September 20, 2023
MANILA -The national government raised P30 billion as planned from reissued 10-year Treasury bonds, with the average yield decreasing amid expectations of a continued policy rate hike pause and eventual cuts ahead.
The T-bonds awarded on Sept. 19 were originally issued last Aug. 17, with a remaining life of nine years and 11 months, fetching an average rate of 6.42 percent.
The new average was 13.8 basis points (bps) lower than the 6.625 percent seen in last month’s auction.
Even then, the auction committee led by the Bureau of the Treasury (BTr) said the resulting average was also lower by 20.5 bps than the coupon rate of 6.25 percent set on its first issuance in August.
“The auction was 2.2 times oversubscribed with total tenders reaching P66.7 billion,” the BTr said in a statement.
“With its decision, the committee raised the full program of P30 billion, bringing the total outstanding volume for the series to P60 billion,” the agency added.
At the Bloomberg Valuation Service, the rate on corresponding corporate bonds was higher by 2.1 bps at 6.441 percent.
On the other hand, the rate on corresponding government securities was pegged 0.3 bps lower at 6.417 percent.
The Bangko Sentral ng Pilipinas (BSP) is widely expected to keep its benchmark rate unchanged at 6.25 percent when the Monetary Board meets on Sept. 21.
According to HSBC Global Research, the imposition on price caps for milled rice points to a continued pause on policy rate hikes since the BSP will be inclined to wait out how this would affect inflation results.
Meanwhile, Pantheon Macroeconomics expects the BSP to start reducing its policy rate as early as this coming November, or the next policy meeting after this month’s.