PHL sells P9B worth of 4-yr. T-bonds at P4.875% coupon rate

The Philippine government was able to sell some P9 billion worth of 4-year Treasury bonds in Tuesday’s auction, with tenders reaching more than P22 billion. According to National Treasurer Robert Tan, the volume of tenders could possibly be due to the strong liquidity in the market and renewed investor interest in government debt papers. The 4-year debt papers fetched a coupon rate of 4.875 percent. “Market investors seemed settled because of the sound fundamentals of the economy right now. They have a comfortable view of interest rates because of it," Tan said. Easing inflation, according to Tan, also contributed to the high demand for debt papers, as commodity prices begin to taper off from the high 5.2-percent inflation rate recorded in June. With this development, Tan said government is looking at issuing retail treasury bonds (RTBs) again this year. By September alone, some P60 billion worth of RTBs are maturing. "We will see if we need to issue the RTBs that [are] going to be redeemed," Tan said. Issuing RTBs is a government strategy to make sovereign securities available to retail investors while instilling savings consciousness in the local market. Along with treasury bonds, issuing RTBs is part of government's financial consolidation efforts to contain the budget deficit at roughly 3.2 percent of the total economic output, or about P290 billion this year. —JMT/VS GMA News