July 6, 2021

The yield on the 7-year Treasury note falls as June inflation slows

A PHP35 billion treasury bond (T-bond) offering by the Bureau of the Treasury (BTr) was completely granted on Tuesday, despite the fact that the domestic inflation rate has slowed, resulting in a reduced interest rate for the seven-year T-bond.

When the debt paper was first issued in April, the average rate was 3.576 percent, which was lower than the coupon rate of 3.625 percent that was established at the time of the first sale.

As a result, the average interest rate on the debt paper is 10.9 basis points lower than the rate of 3.685 percent that it obtained at its last auction last month.

The total amount of tenders received was PHP61.17 billion.

In a Viber message to journalists, National Treasurer Rosalia de Leon partially ascribed the decline in the rate of the T-bond to the slowing of domestic inflation, which fell to 4.1 percent in June from 4.5 percent in the preceding three months, according to the message.

She also said that the inflation figure for last month was lower than the consensus estimate of 4.3 percent.

“The rate is consistent throughout secondary levels,” she said.

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