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

At the Bureau of the Treasury auction on Tuesday, March 15, the yield for the reissued five-year Treasury bond went up to 4.669 percent from 4.012 percent last Jan. 11 when the IOU was last sold.

Investors were willing to buy as much as P35.305 billion of the T-bonds, but the government only accepted P13.035 billion worth of bids, below the P35 billion on offer.

“Interest rates continue to rise as market remains defensive and watchful for FOMC decision on rate hike. Lingering concerns on higher inflation also continue,” National Treasurer Rosalia V. De Leon told reporters after the auction.

On Monday, the Treasury bureau also made a partial award of the short-dated debt papers after two consecutive weeks of failed domestic borrowings

The government raised only P9.137 billion from auction of three-month, six-month and one-year IOUs, below the P15 volume of debt papers placed on the auction book.

The yield on the bellwether 91-day Treasury bill, which banks use to price their loans, increased to 1.305 percent from 0.899 percent at the previous successful sale on Feb. 21.

The 182-day T-bill rate likewise went up to 1.458 percent from 1.157 percent previously.

The yield on the one-year IOU also jumped to P1.734 percent from 1.568 percent three weeks ago. The government was supposed to sell P5 billion of the 364-day T-bills, but it only awarded P3.1 billion.

Last March 8, Finance Secretary Carlos G. Dominguez III said cash flow was not yet a problem for the government owing to P457.8 billion proceeds from the sale of five-year retail treasury bonds (RTBs).

“The government is well positioned to meet disbursements despite BTr's rejections during auctions,” Dominguez said.

On March 1, the Treasury bureau completed its new RTB sale that fetched a coupon rate of 4.875 percent. The government raised P457.4 billion in new money from the sale.

#Treasury bonds

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