The Bureau of the Treasury (BTr) fully awarded the reissued 10-year Treasury bonds at yesterday’s auction, with demand reaching more than twice the government’s offer.
The auction received total tenders worth P60.2 billion, the BTr said in a statement.
The BTr raised the full program of P30 billion, bringing the total outstanding volume for the series to P336.9 billion.
The bond offer fetched an average yield of 6.118 percent, with a remaining term of eight years and 11 months.
This is lower than the previous average of 6.251 percent.
It is also below the current Bloomberg Valuation Service rate of 6.127 percent for the 10-year tenor.
Bids ranged between 6.05 percent and 6.145 percent.
Michael Ricafort, Rizal Commercial Banking Corp.’s chief economist, pointed out that the auction yield for the 10-year bond declined after the comparable 10-year US Treasury yield eased to two-month lows.
The Trump administration signaled that it would prioritize policies that would help reduce the benchmark 10-year US Treasury yield, instead of questioning the Fed’s rate decisions.
“The 10-year Treasury bond average auction yield also eased after BSP Governor (Eli) Remolona hinted of possible RRR (reserve requirement ratio) cut before April 3, 2025 or any time soon. The move could infuse an additional liquidity of about P330 billion into the local banking system that could be used by banks to increase loans, investments in bonds/fixed income, among other assets,” Ricafort said.
John Paolo Rivera, Philippine Institute for Development Studies senior research fellow, said investors still see government securities as a safe option, given the current policy stance and liquidity levels.
“The government’s borrowing strategy and fiscal stance, including its spending priorities, will also shape auction outcomes in the coming months,” Rivera said.
