MANILA — The Bureau of the Treasury (BTr) successfully awarded the entirety of its reissued 10-year Treasury bonds on Tuesday, reflecting robust investor confidence amid favorable interest rates.
According to the Philippines News Agency, the bonds, with a residual maturity of nine years and four months, were sold at an average yield of 5.967 percent. This rate is notably lower than both its previous issuance and the current rates observed in the secondary market. “The 10-year Treasury bond average auction yield eased to 5.967 percent, lower versus the comparable 10-year PHP BVAL yield of 6.06 percent as of September 16, 2024,” stated Michael Ricafort, chief economist at Rizal Commercial Banking Corporation.
Ricafort attributed the competitive auction yield to market anticipation of a potentially larger Federal Reserve rate cut, expected to be announced in their next meeting on September 18, 2024. The strong demand was evident as the auction attracted bids totaling PHP96.3 billion, significantly over the PHP30 billion offered, achieving an oversubscription rate of 3.2 times.
The successful auction raised the full program amount of PHP30 billion, increasing the total outstanding volume of the series to PHP231.9 billion, highlighting sustained investor interest in Philippine government securities.