November 26, 2022

The national government borrowed more than three-quarters of its planned total of P35 billion from Treasury sales on Tuesday, according to the Bureau of the Treasury (BTr).

The Treasury Department said its auction committee partially forged P27.6 billion of its fresh 20-year T-Bonds with a coupon rate of 8.125 percent.

The Treasury noted that Tuesday’s auction was “more than double” oversubscribed as bids submitted totaled 70.4 billion pesos. The average yield for the allocated T-Bond was 8.012 percent, 20.2 basis points higher than the 7.810 percent secondary market benchmark for the same-maturity note.

BTR data showed that investors demanded yields ranging from 7.730 percent to 8.249 percent on issued government bonds.

Last week, BTr fully forgiven its newly issued $35 billion in 25-year T-Bonds, despite investors demanding a yield in excess of secondary market rates.

In recent months, the Treasury has struggled to fully raise the intended amount in its auctions, particularly Treasury bills, as investors maintain an aggressive stance in demanding higher yields amid rising interest rates both domestically and internationally.

This month alone, the national government plans to raise 215 billion pesos from debt sales. The amount includes T-bills worth P75 billion and government bonds worth P140 billion.

For the full year, the government is expected to borrow a total of 2.21 trillion pesos, 75 percent of which will come from local sources while the remaining 25 percent will come from foreign sources.