Long-term benchmark yield drops

Published January 24, 2023, 1:57 PM

by Chino S. Leyco

The Bureau of the Treasury made a full-award on Tuesday, Jan. 24, after the benchmark interest rate on debt falling due in almost 10-years settled below the secondary market levels.

The interest rate of the reissued 10-year IOUs, with a remaining life of nine-years and eight-months, fetched 5.913 percent, lower than the original coupon rate of 6.75 percent sold in September 2022.

The rate was also lower than the prevailing secondary market rates of 6.139 percent to 6.139 percent.

The Treasury awarded P35 billion as planned even as investors were willing to lend as much as P93.696 billion of the reissued 10-year Treasury bonds.

On Monday, Philippine benchmark interest rates for short-term loans also dipped ahead of the US Federal Reserve’s policy meeting next week.

The 91-, 182- and 364-day Treasury bills fetched average rates of 4.211 percent, 4.912 percent and 5.428 percent, respectively, all lower than previous auction results and secondary market rates.