Bids for T-bonds hit more than double ₧30B offered

THE Bureau of the Treasury fully awarded P35 billion in reissued 7-year Treasury Bonds (T-bonds) as investors swamped the auction.

Strong demand was evident on Tuesday’s auction, which attracted a total of P69.76 billion, more than double the P30-billion offer.

The reissued 7-year T-bonds fetched a higher average rate of 3.651 percent, climbing by 7.5 basis points from 3.576 percent in the previous auction.

Following the auction, National Treasurer Rosalia V. De Leon expressed satisfaction that the auction lured strong volume from investors and that the tenor also fetched “reasonable rates.” De Leon attributed this to the “liquid security” of the tenor.

She added that the securities are also “on the sweet spot of the curve” with a remaining life of six years and eight months. The tenor is set to mature on April 22, 2028, and has a coupon rate of 3.625 percent.

Despite the 7.5-basis point uptick in the average rate, De Leon said the rate is still within the secondary level.

On top of the primary auction, she said they also opened the tap facility to auction off an additional P10 billion offering.

For July, the Treasury has set to borrow P235 billion from the local debt market, slightly bigger than the P215 billion it programmed in June.

This year, the national government programmed to borrow a total of P3.1trillion, of which around 75 percent is expected to be raised through domestic sources.

The outstanding debt of the national government as of end-may this year has already ballooned to a record P11.07 trillion, up by 13 percent from P9.795 trillion as of end-2020.

Finance officials last week said the debt-to-gdp ratio this year is projected to rise to 59.1 percent from 54.6 percent in 2020.

It is also expected to peak next year at 60.8 percent—slightly higher than the international recommended threshold—before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024, respectively.