Yields on government debt end flat

YIELDS on government securities (GS) were mostly flat last week as investors stayed on the sidelines while waiting for the release of key US economic data and the issuance of the new retail Treasury bonds (RTB).

Debt yields, which move opposite to prices, went down by an average of 2.47 basis points (bps) week on week, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates as of March 1 published on the Philippine Dealing System’s website.

Yields on Treasury bills (T-bills) were mixed last week. The rates of the 91- and 182-day papers went up by 10.66 bps and 5.30 bps to 5.7292% and 5.9575%, respectively.

On the other hand, the yield on the 364-day T-bill fell by 2.35 bps to 6.1088%.

Meanwhile, rates of benchmark Treasury bonds (T-bonds) declined. At the belly of the curve, the rates of the two-, three-, four-, five-, and seven-year bonds decreased by 1.31 bps (to 6.1185%), 1.29 bps (6.1509%), 1.31 bps (6.1815%), 1.74 bps (6.2054%), and 2.87 bps (6.2327%), respectively.

At the long end of the curve, the 10-, 20-, and 25-year T-bonds went down by 1.99 bps, 14.99 bps and 15.26 bps to yield 6.2435%, 6.2496%, and 6.2468%, respectively.

GS volume traded stood at P11.25 billion on Friday, down from P17.97 billion on Feb. 23.

“Yields moved quite marginally as local participants stayed on the sidelines ahead of the RTB 30 issuance last week. Moreover, participants remained on the watch for crucial economic data from the US, such as the second release of the US gross domestic product (GDP) and the personal consumption expenditures (PCE) inflation,” a bond trader said in an e-mail. “Market participants generally remained cautious on the major US economic data releases as these data were seen to influence the future policy moves of the US Federal Reserve, and consequently our local Bangko Sentral ng Pilipinas,” the bond trader added.

The government raised a record P584.86 billion from its offer of five-year retail bonds, the Bureau of the Treasury said last week.

Of the total, P212.72 billion was awarded at the rate-setting auction for the 30th tranche of RTBs held on Feb. 13.

An additional P372.14 billion was raised during the nineday public offer period, with P128.69 billion of this being new money and P243.45 billion coming from the bond exchange component of the offering. — L.O. Pilar