BTr rejects tenders for 7-year T-bond due to high yield demand

The Bureau of the Treasury’s (BTr) auction committee fully rejected all bids for the re-issued seven-day Treasury bond (T-bond) on Tuesday after investors asked for high yields.

Had the committee made a full-award, the rate of the debt paper would have risen to 4.814 percent from 4.468 percent.

BTr offered the securities for PHP35 billion and total bids reached PHP41.42 billion.

“Full rejection rates are unreasonably high with expectations for inflation to trend downward. BSP (Bangko Sentral ng Pilipinas) remains committed to support economic recovery,” National Treasurer Rosalia de Leon told journalists in a Viber message on Tuesday.

She said the “market maybe waiting for (the) December inflation print.”

The Philippine Statistics Authority will release the December 2021 inflation rate on Wednesday.

The rate of price increases decelerated to 4.2 percent last November from the previous month’s 4.6 percent.

The average inflation in the first 11 months of last year stood at 4.5 percent, higher than the government’s 2 percent to 4 percent target band.

Despite the rejection of bids, the government’s “cash balance remains comfortable to meet requirements,” De Leon said.

“Ended 2021 with strong revenue collections and ODA (official development assistance) disbursement even after the rejection of remaining bond auctions last year,” she added.

Source: Philippines News Agency

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