The government sold P25 billion worth of debt papers on Tuesday’s auction as rates fell across the board, the Bureau of Treasury said.
Rates for the re-issued treasury bonds settled at 3.25 percent, down from 3.647 percent in the previous auction of the same tenor in February.
“The auction committee decided for a full award of the re-issued Treasury Bonds with remaining life of 3 years and 7 months on the back of strong demand for the security,” the Treasury said in a statement after the auction.
The BTr attributed the lower rates to the big participation of competitive and non-competitive bidders.
Tenders for the government’s P25-billion re-issued seven-year IOUs offer was thrice oversubscribed at P76.842 billion. The bonds have a remaining life of four years and will mature on November 22, 2019.
Meanwhile, the Treasury is set to sell P135 worth of government debt paper in the second quarter.
The agency said in a notice posted in its Web site it would keep a domestic borrowing cap of P135 billion for the April-to-June period in 2016 through the auction of treasury bills and bonds in the period.
The government plans to sell P20 billion worth of 91-, 182-, and 364-day debt papers on April 6, May 4 and June 8. It will also sell P25 billion worth of treasury bonds through auctions on April 21, May 19 and June 30.
The auction of the various debt paper with short and long tenors were the same as programmed in the four quarters of this year.
The outlook for 2016 reflects a borrowing mix of 85 percent from domestic sources and 15 percent from the external market.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. earlier said inflation in March likely decelerated further to as low as 0.6 percent from 0.9 percent in February mainly due to lower power rates.
The manageable inflation environment prompted the policy-setting Monetary Board to keep the benchmark interest rates steady during its meeting Wednesday last week. It was the 12th consecutive time that the board kept the rates steady since October 2014.
The board maintained the key policy rates at 4 percent for the overnight borrowing or reverse repurchase facility and 6 percent for the overnight lending or repurchase facility. The interest rates on term RRPs, RPs and special deposit accounts were also kept steady. The reserve requirement ratios were likewise left unchanged.
Latest forecasts showed that average inflation was likely to settle within the target range of 2 percent to 4 percent for 2016-2017.
The Monetary Board noted that the risks surrounding the inflation outlook had remained tilted to the downside, as downward price pressures could arise from slower-than-expected global economic activity and potential second-round effects from lower international oil prices.