Manila: The Average rate of the five-year Treasury bond (T-bond) declined Tuesday as demand remains strong, data released by the Bureau of the Treasury (BTr) showed. The rate of the debt paper declined during the day's auction to 5.772 percent from 5.896 percent during the auction of the same tenor last July 1.

According to Philippines News Agency, BTr's auction committee made a full award of PHP30 billion even as bids reached more than twice at PHP79.67 billion. Rizal Commercial Banking Corporation chief economist Michael Ricafort traced the huge demand for the debt paper to the BTr's earlier announcement that it will not have major issuance against for the rest of the year, such as retail treasury bonds (RTBs) or long-term treasury notes.

The BTr issued PHP507.16 billion worth of RTBs in August. Ricafort said the recent 25 basis points reduction in the Bangko Sentral ng Pilipinas (BSP) key rates also played a part during the day's T-bond auction, noting that the rate cut lowered borrowing costs.