Benchmark interest rate for long-term debt papers declined allowing the national government to raise its borrowing program and take advantage of the favorable yield.
At the Bureau of the Treasury auction on Tuesday, July 26, the yield for the reissued 25-year Treasury bond, with a remaining life of 13 years and four moths, settled at 6.894 percent.
The average rate was lower than the 6.922 percent fetched in the secondary market, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.The Treasury bureau made a full award of P35 billion, bringing the total outstanding volume for the series to P198.2 billion.National Treasurer Rosalia V. De Leon said the government saw a repeat of strong interest on long-end with attraction of yield pick up.
“Interest rate was lower than secondary and market did not ask for any maturity or illiquidity premium,” de Leon said. With strong demand, the Treasury opened its tap facility to accommodate additional P10 billion borrowings. De Leon added that the government plans to sell more long-term IOUs next month on the back of market’s strong appetite for the instruments.
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