Business NEWS

Speculation about a possible policy rate adjustment and higher full-year inflation pushed up the yield for long-term Philippine debt papers.

Banks pressed for an increase in Philippine benchmark interest rates for short-term loans as the government mulls borrowing from small investors before the end of the year through the sale of retail Treasury bonds (RTB).

The national government reduced the amount of subsidy to government owned and controlled corporations (GOCCs) amid the widening budget deficit, based on data from the Bureau of the Treasury.

Lingering concerns over higher than expected inflation and the looming scaled back stimulus program in the United States pushed up the interest rate for long-term Philippine debt papers.

Benchmark interest rates increased across the board at Tuesday’s auction of short-term government debt papers, as investors wait for the latest inflation report and shift in policy at US Federal Reserve.

Government borrowings grew at a much slower pace in the first nine months of the year as the need for additional financing to augment the country’s coronavirus war chest started to wane, data from the Bureau of the Treasury revealed.

The Philippine government debt rose in September nearing the P12-trillion mark due to higher borrowings from local and foreign creditors as well as depreciation of the peso, the Bureau of the Treasury reported.

The benchmark interest rate on debt falling due in seven years rose at Tuesday’s auction of the government IOUs at the Bureau of the Treasury.

Benchmark interest rates move sideways

The national government’s budget deficit breached the P1 trillion mark in the first three quarters of the year, but cuts in expenditures allowed the Duterte administration to keep the funding gap below the ceiling.

The government rejected bids for its long-term debt paper as investors sought a higher yield amid lingering inflation concerns and expectations the US Federal Reserve will soon hike interest rates.

Benchmark interest rates moved sideways on Monday, Oct. 18, as yields for the three-month and one-year IOUs resumed their increase, while the six-month paper marginally dropped.

The benchmark interest rate on debt falling due in five-years rose at Tuesday’s auction of the government IOUs at the Bureau of the Treasury.

Investors pressed for an increase in Philippine benchmark interest rates for short-term loans following the US Federal Reserve’s pronouncement that it will likely begin reducing its monthly bond purchases.

Debt payments by the Philippine government declined significantly in August due to lower principal payments to domestic creditor, data from the Bureau of the Treasury showed.

The government on Friday, Oct. 8, listed its first onshore retail dollar bonds (RDBs) in the Philippine Dealing and Exchange Corp. (PDEX), bringing closer to fulfilling its twin goals of deepening the domestic capital markets and broadening financial inclusion.

Lingering concerns over high inflation pushed up the interest rate for long-term Philippine debt papers.

Short-term benchmark interest rates slightly rose as investors anticipated inflation last month moved at a much faster pace than the government’s target.