Treasury awards full P20B at T-bonds auction

THE Bureau of the Treasury (BTr) has awarded the full P20 billion on offer for the reissued 10-year Treasury bonds (T-bonds) auctioned off on Tuesday, on the back of low rates brought about by the downward trajectory of inflation.

Deputy Treasurer Erwin D. Sta. Ana said, “I think the market is actually just looking for how inflation would be moving forward. So now that we have seen inflation falling within the band already, then it just shows on the rates for this auction.”

The rates for the T-bond posted a huge drop of 63.30 basis points settling at 6.196 percent compared to the last auction rate for the security of 6.829 percent.

Tenders for the security were almost thrice oversubscribed at P54.603 billion.

“And then there’s also of course news about possible easing by the BSP [Bangko Sentral ng Pilipinas] given the pronouncements of [Central Bank] Governor [Benjamin E.] Diokno in his interview. So we

think those are the catalysts for these rates,” he added.

In his first news conference last week, Diokno said he sees a downward path for inflation. Inflation eased to 3.8 percent in February from 4.4 percent in the first month of the year.

The Monetary Board is expected to meet on March 21—Diokno’s first—and may discuss its policy stance on this development.

Last week, the BTr closed the sale of its 22nd tranche of retail treasury bonds, raising a total of P235.935 billion. The RTB bears a five-year maturity at a coupon rate of 6.25 percent.

During its rate-setting auction on February 26, the BTr awarded P113.772 billion, which is nearly four times oversubscribed from the initial offering of P30 billion, as market investors showed strong appetite for the government security.