NextGen Day

MANILA, Philippines — The Bureau of the Treasury (BTr) auctioned a seven-year Treasury bond (T-bond) on Tuesday, but investors’ demand for higher returns resulted in bids being rejected once again.

If the offers were accepted, the debt paper’s coupon rate would be 6.5 percent, according to the BTr, which is “trending higher than the similar secondary market benchmark.”

The debt paper was auctioned for PHP35 billion by the BTr, and tenders totaled PHP36.3 billion.

In a Viber message to media, National Treasurer Rosalia de Leon said, “Markets are still roiled by mounting inflation fears from surges in oil and commodities prices.”

Investors are also on the fence about the Federal Reserve’s forthcoming rate hikes, which are largely expected to begin this month, according to De Leon.

Despite the government’s ability to finance its PHP4.955 trillion 2022 distribution program despite rejections at debt paper auctions since last week, de Leon is optimistic.

“With funds from the strong RTB (retail treasury bond) 27 outcome, we are in a good position to meet payments even after rejections,” she said.

De Leon claimed that the most recent five-year RTB issuance, which had a coupon rate of 4.875 percent, was made with “excellent timing (and) good execution” and had “strong participation.”

RTBs are geared at small investors, with a minimum investment of PHP5,000.

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