The government sold P11.772 billion worth of long-term debt paper amid global uncertainties that are pushing interest rates higher.
Rates for the Treasury bonds averaged 3.605 percent, up 41.9 basis points from the previous auction rate of 3.186 percent.
National Treasurer Roberto Tan attributed the uncertainties of the investors to the possible US Fed rate hike in December.
“… Apparently there’s heightened uncertainty on the future course of… US rates and there is a probability now of an increase or positive Fed action by December, around 66 percent to 70 percent probability,” Tan told reporters after Tuesday’s auction.
The government’s P25-billion bond offering was undersubscribed with just P22.082 billion worth of tenders received, the first undersubscription under the new administration.
“The uncertainty 9is that) a lot of players do not know how to price. And therefore, we’d rather just step aside for the meantime and that is probably the result of the decline of the the volume, which is below what has been offered,” Tan said.
“We’ll we just try to maintain a yield curve that is positive, we do not want to go against market trends, but of course we are conscious about our yield. Our yield curve … (is) relatively flat… right now. So we are just following that,” Tan added.
The reissued debt paper has a remaining life of seven years after being issued in April this year.