5-yr T-bond rate up

FILE: The Bureau of the Treasury (Photo: Bureau of the Treasury/Facebook)

MANILA — Average rate of the Philippines’ five-year Treasury bond (T-bond) rose by 31 basis points Tuesday, but National Treasurer Rosalia De Leon said this is within their expectations given the rise in central bank’s key rates.

Rate of the debt paper averaged at 5.902 percent from 5.592 percent previously.

The Bureau of the Treasury’s (BTr) auction committee made a full award of PHP15 billion after tenders reached PHP24.574 billion.

It considered a partial award during the auction as a result of the rate uptick. De Leon said there is only four basis points difference if they decided on a partial award thus, the full award.

“If you look at it, it’s more or less aligned with the current rates given the policy actions of the central bank,” she said, referring to the hike in the Bangko Sentral ng Pilipinas’ (BSP) key rates so far this year.

Meanwhile, De Leon said the planned issuance of Marawi bond, proceeds of which will be used for the rehabilitation of Marawi City, is not expected to impact on retail treasury bonds (RTBs) because “there’s enough liquidity” and because people would be willing to help in Marawi’s recovery.

She, however, declined to give any amount to be raised pending the report of the Bangon Marawi group and the funds that will come from official development assistance (ODA), donations, and the national budget.

Under the 2018 national budget, PHP10 billion has been allocated for Marawi’s rehabilitation while PHP3.5 billion funding was programmed under the proposed 2019 national budget.

“Timing of the issuance would depend on the phasing of the projects,” she said.

De Leon added Finance officials have secured the Agri-Agra eligibility of the bond, and are considering an online sale instead of investors going to their banks to make placements.