GOV’T RAISES ANOTHER P 35B FROM T-BONDS; RATES DIP

The interest on seven-year Treasury bonds went down by 15.2 basis points (bps) to average at 6.588 percent from 6.74 percent in the previous auction held on June 14, consistent with the trend observed in Asian bond markets.

In a more recent offering of seven-year T-bonds, on June 28, the auction committee led by the Bureau of the Treasury rejected all bids when a full award would have raised the yield by 20.7 bps to 6.947 percent.

Tuesday’s auction offered the third reissue of the debt paper originally issued on May 17, resulting in the first full award after a full rejection and two partial awards.

This latest auction brought the average rate just 8.8 bps above the coupon rate of 6.5 percent.

The government raised P35 billion as planned, raising the total outstanding volume for this series to P74.66 billion.

The offering was oversubscribed, with investors tendering a total of P54.844 billion.

National Treasurer Rosalia de Leon told reporters the committee went for a full award this time as “the rates were aligned with secondary levels.”

At the time of the auction, government and corporate bonds were fetching lower rates at 6.395 percent and 6.454 percent, respectively.

In the latest Asia Bond Monitor report of the Asian Development Bank, the multilateral lender said long-term bond yields in the emerging economies of East Asia— which include the Philippines —declined between June 15 and Aug. 24 amid mounting risks and a dimming economic outlook, even as financial conditions eased modestly.

In the Philippines, the ADB observed that the peso-denominated government bond yield curve flattened as yields for short-dated tenors rose and those for longer-dated maturities declined.