Philippines 7-yr T- Bond Average Rate Up Tuesday

Average rate of the Philippines’ seven-year Treasury bond (T-bond) rose Tuesday to 4.519 percent from 4.484 percent last April 18.

Results of the Bureau of the Treasury (BTr) auction for the debt paper showed that rate of the debt paper rose by 1.9 percent from the previous rate and Deputy National Treasurer Erwin Sta. Ana traced this to external developments.

“Demand in this particular case is slightly muted because of, I think, anticipation of further external developments like the coming Fed meeting,” he told journalists after the auction.

The Federal Reserve will have its next policy meeting on June 13-14, 2017 and it is widely expected to announce another rate hike after the total of 50 basis points hike last December and March. The BTr auction committee made a partial award of PHP4.026 billion for the T-bond against the PHP15 billion offering after total tenders amounted to only PHP12.851 billion.

Sta. Ana said uncertainties overseas also made banks more cautious in parting with their funds, thus, the preference for shorter-dated securities.

He, however, noted that concerns on the martial law declaration in Mindanao, is not seen as a factor on domestic interest rates.

“As far as we have observed the market over the past weeks, we observed interest rates are actually sliding down, it is observing a downward trajectory even during the declaration of martial law last week. We have observed that it has continued that path so there is really no reason domestically why this turn out is such,” he added. (Joann Santiago/PNA)