Interest rates for long-term Philippine debt papers declined despite weaker economic growth performance in the second quarter.
At a Bureau of the Treasury auction on Tuesday, Aug. 9, yield on the reissued 10-year bonds with a remaining life of six years and five months fetched at 5.791 percent, below the secondary market rate of 5.853 percent.
Investors were willing to buy as much as P105.7 billion of the Treasury bonds, more than three-times the P35 billion on offer.
The bureau accepted P35 billion worth of bids as planned during the auction, but opened its tap facility accommodate additional P10 billion.
“Another well received auction with three-times bid cover and interest rates lower than secondary level,” National Treasurer Rosalia V. De Leon told reporters after the auction.
The decline in interest rates came hours after the Philippine Statistics AuthorIty’s announcement that the country’s economy slowed to 7.4 percent in the second-quarter from 12.1 percent a year earlier.
The June quarter growth also dropped from 8.2 percent in the first three-months of 2022.
Socioeconomic Planning Secretary Arsenio M. Balisacan attributed the slower economic output to accelerating inflation brought about by the Russia-Ukraine war, weakening global demand, and supply chain disruptions brought by lockdowns in China.
However, Balisacan remains confident that the full-year growth would settle within the government’s target range of 6.5 percent to 7.5 percent.
At end-June, the country’s economic growth averaged at 7.8 percent.