MANILA — The Bureau of the Treasury’s (BTr) auction committee on Tuesday made a partial award for the newly-issued three-year Treasury bond after banks asked for high yields.
Coupon of the debt instrument was set at 4.25 percent, higher than the 4.1750 percent the same tenor fetched at the secondary market Tuesday morning.
BTr offered the paper for PHP20 billion and banks tendered a total of PHP319.107 billion. The auction committee accepted PHP14.891 billion.
National Treasurer Rosalia de Leon said they made a partial award to moderate the jump of interest rates.
She traced banks’ preference for short term securities to rate hike expectations both from the Bangko Sentral ng Pilipinas (BSP) and US’ Federal Reserve this year.
Analysts expect the BSP to raise key rates by as much as 50 basis points this year starting in the second quarter while the Fed is expected to increase its rates by around 75 basis points.
De Leon said there were also some economists who raised the issue of the domestic economy’s overheating, which might result to further rise of inflation rates.
Monetary officials, however, have kept on assuring the public that the economy is not overheating since macroeconomic fundamentals continue to improve and sustained growth of the economy is being met by rising demand.