The Bureau of the Treasury (BTr) fully awarded the new five-year Treasury bonds (T-bonds) during Tuesday’s auction, setting the coupon rate at 6.125 percent.
The BTr said the auction was nearly 2.5 times oversubscribed as the total submitted bids amounted to PHP74.3 billion.
With its decision, the committee raised the full program of PHP30 billion.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the five-year T-bond average auction yield was slightly higher than the comparable five-year PHP Bloomberg Valuation (BVAL) yield at 6.03 percent as of Jan. 8, 2024.
In a Viber message, Ricafort said, however, it was lower compared to the 6.512 percent auction yield during the five-year T-bond auction on Oct. 10, 2023 amid easing headline inflation trend and the latest dovish signals on possible -1 percentage point local policy rate cut in 2024.
“[The] lower 5-year T-bond auction yield [was] also supported by the recent decline in global crude oil prices to among 2-year lows or since December 2021, thereby could help further ease headline inflation towards the BSP’s inflation target of 2%-4% for the coming months that would support Fed and local policy rate cuts in 2024,” he said. (PNA)