Inflation seen tracking easing trend in yields of debt papers
THE national government started its June domestic borrowing program on a high note as the Bureau of the Treasury (BTR) successfully raised the full P25 billion programmed amount from the sale of Treasury bonds (T-bonds).
Tuesday’s auction saw the average rate for the reissued T-bonds, which has a remaining life of 9 years and 3 months, settling at 5.958 percent, below the secondary market benchmark of 5.971 percent.
investors’ asking rates during the auction ranged from a low of 5.9 percent to a high of 5.98 percent.
“The auction attracted P74.8 billion in total tenders or three times the P25.0 billion offer,” the BTR said in a statement after the auction.
This is now the sixth consecutive week that the Treasury successfully made a full award of its T-bonds auction.
Moving forward, Rizal commercial Banking corp. chief economist Michael L. Ricafort told the Businessmirror that the anticipated further easing of the country’s inflation in the coming months could “fundamentally support the easing trend in Treasury bill and [T-bond] auction yields.”
Ricafort added that recent hints by Bangko Sentral ng Pilipinas (BSP) officials about a “possible” pause on local policy rates in June 2023 would contribute to the lowering of the government debt paper’s rates.
Last week, national Treasurer
Rosalia V. De Leon said the BTR foresees interest rates for both T-bills and Treasury bonds on a downward trend. De Leon pinned the decline to investors’ improved outlook on the Philippine economy and after monetary authorities put a brake on policy rate hikes as inf lation slowed. (Related story: https://businessmirror.com.ph/2023/05/23/improved-outlookto-lower-debt-paper-rates/)
Tuesday’s auction was the Treasury’s first auction programmed for its June borrowing program.
For the month of June, the Treasury aims to raise P185 billion from the sale of T-bills and T-bonds. The Treasury plans to generate P60 billion from four auctions of T-bills and P125 billion from five auctions of T-bonds.