The Bureau of the Treasury (BTr) fully rejected all bids for the seven-year Treasury bond (T-bond) on Tuesday as the auction committee considered the rates, which were lower than the previous auction, to remain high.
It offered the T-bond for PHP20 billion and tenders reached PHP52.267 billion.
Had the committee awarded the paper, the rate of the securities would have declined to 4.395 percent from 4.468 percent previously.
“We find that there is more room for rates to decline following (the) deceleration in inflation and assurance from (Bangko Sentral ng Pilipinas) Governor (Benjamin Diokno) to hold rates steady,” National Treasurer Rosalia de Leon told journalists in a Viber message.
The rate of price increases further slowed to 4.2 percent in November from 4.6 percent in October.
The average inflation to date stood at 4.5 percent, still above the government’s 2 percent to 4 percent target band.
De Leon said the “market has not sufficiently incorporated that inflation will be back within the target as supply disruptions are addressed.”
She said investors are also considering the looming Federal Reserve rate tightening and the pace of tapering on asset purchases.
“On (the) domestic front, (the market) will be watching on December inflation print and results of (the) MB (Monetary Board) policy meeting this Thursday,” she added.
Developments on the pandemic, such as the emergence of new variants of the coronavirus disease 2019 (Covid-19) and efficacy of the vaccines, are also among the other factors affecting market sentiments, she said.
For next year, de Leon said the government would be “borrowing less and reducing domestic (borrowings) at 77 (percent of the total) instead of 81 percent to make room for (the) private sector with renewed lending following (the) opening of the economy.”
Source: Philippines News Agency
