NextGen Day

MANILA, Philippines — On Tuesday, the 10-year Treasury bond (T-bond) rate increased, resulting in the Bureau of the Treasury’s partial award of the debt paper during an auction (BTr).

The securities’ average rate increased to 6.313 percent, up from 6.092 percent in the previous auction.

From a total offering of PHP35 billion, the auction committee awarded PHP17.559 billion in debt paper. The total amount of tenders received was PHP56.406 billion.

In an emailed response to questions from the Philippines New Agency, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort attributed the partial award to “higher bid yields, reflecting less need for the government to borrow locally after recent foreign borrowings/bond sales and the seasonal increase in tax revenue collections in April and as the election is less than two weeks away.”

“Higher bid yields may have been prompted by higher US/global bond yields amid more aggressive Fed rate signals, with the widely anticipated +0.50 Fed rate hike on May 4, 2022, +2.00 Fed rate hikes by September 2022, and +2.50 Fed rate hikes by end-2022 being priced in by the markets, resulting in some rejections and partial awards during the auction,” he added.

To help manage the increasing inflation rate, the Federal Reserve raised its key rates by 25 basis points in March, the first time since December 2018, to between 0.25 and 0.50 percent.

The consumer price index (CPI) in the United States continued to rise in the first quarter of 2022, reaching a 40-year high of 8.5 percent in March.

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