BTr partially allocates new 3-year bonds amid rising yields

MANILA, Philippines — The Bureau of the Treasury (BTr) on Tuesday (April 5th) raised 25.8 billion pesos from its 35 billion peso offering of new three-year bonds, while capping the rise in yields sought by domestic creditors in an environment of rising inflation.

Tuesday’s auction for treasury bills maturing on April 7, 2025 was 1.5 times oversubscribed as it attracted 53.6 billion pula of tenders.

However, the BTr was allocated at a coupon rate of 4.25%, as the debt paper was capped at a maximum of 4.37%. Bidding rates hit a low of 3.875%.

National Treasurer Rosalia de Leon said the debt market remained “defensive” after March’s record five-month inflation of 4%, already at the upper end of the target range of 2-4% price increases manageable by government.

The Bangko Sentral ng Pilipinas (BSP) had said headline inflation would exceed the target range in the second quarter of this year.

De Leon added that the market was nervous due to BSP Governor Benjamin Diokno’s recent statement that the central bank may raise interest rates in the second half of 2022.

TSB

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