The national government on Tuesday fully awarded P25 billion worth of debt paper following lower interest rates amid the high investor confidence after the first State of the Nation Address of President Rodrigo Duterte Monday.
Rates for the treasury bonds stood at an average of 3.016 percent, down 48.4 basis points from the previous auction rate of 3.461 percent.
Interest rate bids ranged from 2.898 percent to 3.07 percent.
“Of course, we are very glad that there was very good appetite and very good bids. So this is of course due to the turnout especially with the SONA just happening [last Monday]” said National Treasurer Roberto Tan after the auction.
Tenders for the government’s P25-billion bond offering was nearly twice oversubscribed at P44.72 billion.
The reissued debt paper has a remaining life of six years and eight months just issued in April this year.
“I think the market is very pleased with the policy pronouncements of the President [which] would be business-friendly and market-oriented policy-friendly for the country,” Tan said.
He said economic developments pointed toward a low interest rate scenario, at least probably until the latter part of the year.
“Given that the [US] Fed seems to be more dovish in its announcements, so that’s the international side. Of course Europe is on a slow growth environment, as well as Japan and other countries, so there is a tendency for the major economies [and] monetary authorities to provide a monetary stimulus to help the economy ride on,” Tan said.
“Domestically, the macroeconomic fundamentals are very sound, the liquidity of the market is still quite deep, and these are all helping the sentiment for investors to be very aggressive,” he added.