7-year T-bond rate climbs on political noise
Yields on long-dated local debts of the government went up on Tuesday’s sale of Treasury bonds (T-bonds) as political noise at home and persistent global trade uncertainties weighed on investor sentiment.
But the Bureau of the Treasury (BTr) was still able to raise its target amount of T-bonds and accept some of the excess demand.
Auction results showed the BTr raised a total of P37 billion via reissued T-bonds, which have a remaining life of seven years and six months. The proceeds were bigger than the initial plan to borrow P30 billion.
The offering attracted P81.8 billion in total tenders, exceeding the original size of the issuance by 2.7 times and prompting the BTr to accept some of the excess demand via its tap facility.
But despite the strong investor appetite, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the average rate for the debt paper still went up due to political developments onshore and continued tariff risks in the US.
“The seven-year Treasury bond average auction yield was higher after the latest political noises related to the arrest of former President Duterte and uncertainties related to US President Donald Trump’s tariff threats,” Ricafort said.
The BTr said the seven-year T-bond fetched an average rate of 6.143 percent, higher than the 5.973 percent seen during the previous auction of the same tenor last Feb. 11.
It was also more expensive than the 6.096 percent quoted for the comparable tenor in the secondary market as of March 10.
