BTr turns down bids for 10-year T-bonds

The Bureau of the Treasury’s auction committee on Tuesday rejected all bids for the 10-year Treasury bond on what National Treasurer Rosalia De Leon dubbed as aversion for long-tenor securities.

BTr offered the debt paper for PHP20 billion but bids only amounted to PHP18.676 billion.

Banks also asked for high yields, with the highest hitting 6.500 percent, higher than the 4.915 percent the same tenor fetched during the auction on Nov. 7, 2017.

In the secondary market, the same tenor fetched a yield of 5.9157 percent in the morning session Tuesday.

De Leon said appetite for the 10-year bond was low because banks were hopeful for the increase of interest rates in the coming months vis-à-vis the expected hikes in respective key rates of the Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

She said banks were  also somewhat concerned on issues on the supposed overheating of the domestic economy.

“But I guess all those fears have been allayed by the Governor (Nestor A. Espenilla Jr.) and Deputy Governor Diwa (Guinigundo) also,” she said.

Meanwhile, De Leon said they were still awaiting regulatory approvals for the government’s planned US dollar bond and Panda bond issuances.

She said the planned US bond issuance, which was normally issued in the first quarter of the year, was still being assessed by the US’ Securities and Exchange Commission (SEC), which was also reviewing the Philippine government’s filing, reform programs and continuity of policies, among others.

Last year, the government issued USD2-billion worth of 25-year global bond, USD500 million of which was in new money while the remaining volume was used to swap previously-issued bond with higher yields.(PNA)