10-YEAR TREASURY BOND RATE DECLINES FURTHER

The interest on the 10-year treasury bond yesterday fell further, dipping by 1.2311 percentage points to average 5.644 percent compared to the coupon rate.

Yesterday’s average was six basis points lower than the corresponding 5.704 percent prevailing rate for done deals at the secondary market.

The latest rate for the 10-year T-bond—originally issued last Jan. 10 at a coupon of 6.875 percent—was also lower by 31 basis points compared to results from the previous reissue in April when interest averaged 6.954 percent.

On Tuesday, investors tendered a total of P65.84 billion or more than thrice the offer. The government raised P20 billion as planned.

Finance Secretary Carlos Dominguez yesterday said the Cabinet’s Economic Development Cluster (EDC) came up with a “carefully crafted and bold expenditure catch-up plan” to enable the economy to expand above 6 percent for the whole of 2019.

Dominguez said in a statement this was meant to substantially make up for underspending in the first quarter, which was estimated at about P1 billion a day.

He said the EDC, which he heads, received commitments from key infrastructure agencies during its May 24 meeting to vigorously implement their updated spending programs “to substantially offset the lower spending in the first quarter resulting from both the budget delay and the election ban on public works.”

“By our estimates, the Philippine economy should have grown by at least one percentage point higher, at 6.6 and possibly 7.2 percent in the first quarter, if the 2019 fiscal program had been approved on time,” Dominguez said.