BTr awards partial 7-year bond

Photo shows the façade of the headquarters of the Bureau of the Treasury in Manila at the Ayuntamiento Building, Cabildo St. Corner A. Soriano Avenue in Intramuros. WIKIMEDIA

MANILA – Bureau of the Treasury’s (BTr) auction committee members partially awarded the seven-year Treasury bond (T-bond) Tuesday, as investors took a wait-and-see stance amid economic developments overseas.

BTr offered the debt paper for P20 billion and tenders reached P22.149 billion. However, the auction committee awarded P10.399 billion.

Rate of the debt instrument declined to 4.503 percent from 4.845 percent during the auction of the same tenor last Jul. 16.

Deputy Treasurer Erwin Sta. Maria told reporters after the auction that although bid for the debt instrument is higher than the offered volume, it is “not too high” which means “they really just covered the auction size.”

“And the committee thinks that it’s basically a reflection of a wait-and-see attitude from the participants because you know FOMC is around the corner and US treasuries are increasing overnight, you can see some increases in the 10-year bonds. So that actually brought about the results,” he said.

The Federal Open Market Committee will have its next meeting on Sept. 17 and 18.

Some market players forecast another rate cut after the 25-basis-point reduction last July to help ensure sustained growth of the US economy.

Sta. Maria further said domestic liquidity “is still quite ample” as shown by the auction results.

He also discounted the decline in interest rates of government securities as well as risk aversion to be a trend right now, as domestic factors like the deceleration of inflation rate, ample liquidity, and easing of the BSP rates remain positive.(PNA)


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