BTR BORROWS P 22.9B AS RATES DECLINE

The national government raised P22.969 billion out of a P35-billion offer of five-year Treasury bonds, still resorting to a partial award even as rates are going down.

Tuesday’s offer was a reissue of 20-year T-bonds that were first awarded in September 2007, with four years and nine months remaining until they mature.

The offering was oversubscribed with a total of P65.514 billion of tenders from investors.

With the partial award, the debt paper fetched an average of 6.568 percent, which was 56.3 basis points (bps) lower than the 7.131 percent average in the previous auction last Nov. 8.

National Treasurer Rosalia de Leon told reporters “rates aggressively declined” as there was considerable liquidity in the market considering that there will be securities maturing next week.

De Leon said the auction committee made decisions to take advantage of these factors, and to further bring rates close to the level prevailing at the secondary market.

She was referring to the 6.549-percent rate for government bonds, which was 1.9 bps lower than Tuesday’s auction result.

For deals on comparative corporate bonds available at the secondary market, the prevailing rate was 6.4 bps higher at 6.531 percent.

“The markets also took signal from the slower pace of rate hikes by the US Federal Reserve and the Bangko Sentral ng Pilipinas,” De Leon added.

Both the American and Philippine central banks earlier this month raised their respective policy rates by 75 bps, and are expected to continue raising rates in December, but forecasts point to an increase of only 50 bps this time.