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10-year T-bond coupon rate declines

MANILA – The rate of the Philippines’ 10-year Treasury bond (T-bond) declined Tuesday, which National Treasurer Rosalia de Leon attributed to the high liquidity situation in the domestic economy. Coupon rate of the freshly auctioned debt paper went down to 2.875 percent from the 6.875 percent the same tenor that was also newly-auctioned and fetched during the auction in January last year.   The Bureau of the Treasury (BTr) offered the debt instrument for PHP30 billion and the auction committee made a full award. Total bids amounted to PHP59.7 billion. The government reported an uptick in the June 2020 inflation rate to 2.5 percent from last May’s 2.1 percent. Despite the acceleration of domestic inflation rate to a three-month high level, de Leon said this did not affect investors’ sentiment during the T-bond auction Tuesday. Average inflation in the first half of the year stood at 2.5 percent, within the government’s 2 to 4-percent target band until 2022. “Inflation remains benign at 2.5 percent,” she said. Meanwhile, the rate setting auction for the retail treasury bond (RTB) has been pushed a day later to July 16, de Leon said but did not elaborate on the reason for the rescheduling. RTBs are debt papers intended for small investors since minimum investment is PHP5,000 and additional placements need to be in increments of PHP5,000. The last time BTr issued RTB was in January this year.  During the rate-setting auction alone, the auction committee awarded some PHP134 billion worth of three-year paper, more than fourfold from the PHP30-billion offer. (PNA)

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