BTr rejects bids for 5-year T-bonds

National Treasurer Rosalia de Leon told reporters that the auction committee rejected all bids because of the high rates sought by banks. (Photo: Bureau of the Treasury/Facebook)

MANILA— The Bureau of the Treasury (BTr) on Tuesday fully rejected bids for the five-year Treasury bonds (T-bond) after banks offered a lower amount during auction.

The BTr offered the debt instrument, which has a remaining tenor of four years and one month, for PHP20 billion but banks offered only a total of PHP10.094 billion.

Had the auction committee accepted the bids, the rate of the T-bond would have risen to as much as 4.681 percent, higher than the 3.979 percent it fetched in the previous auction.

The rate of the same tenor in the secondary market Tuesday morning stood at 4.8393 percent.

National Treasurer Rosalia de Leon told reporters that the auction committee rejected all bids because of the high rates sought by banks.

She said the government is not short on cash given its recent Retail Treasury Bond (RTB) issuance, wherein it gained PHP255.4 billion, proceeds of which would help finance the government’s 2018 programs.

She said it was obvious that banks are “already closing the books and they feel that even if they submit a very high offer, then obviously we are in a good position to reject”.
De Leon does not expect the rates to go down next year, citing the expectation of three more Fed rate hikes next year.