7-yr PHL T-bond rate rise

MANILA, July 22 (PNA) – – Average rate of the Philippines’ seven-year Treasury bond rose to 3.742 percent during an auction by the Bureau of the Treasury (BTr) Tuesday.

This is higher than the previous rate of 3.426 percent but National Treasurer Rosalia De Leon is not worried noting that it is in line with secondary market rates.

”We are pleased with the result (of the auction) given that this (rate) is in line with the market,” she told reporters after the auction.

Total tenders were nearly twice the Php25 billion offering after it reached Php48.98 billion. The auction committee made a full award.

De Leon said banks have already priced in a possible increase in the Bangko Sentral ng Pilipinas’ (BSP) key rates when its policy-making Monetary Board (MB) meets next week.

To date, the BSP’s overnight borrowing rate is at record-low of 3.5 percent and the overnight lending rate is at 5.5 percent. These were maintained since the last 25 basis points cut in October 2012.

The National Treasurer cited demand for the seven-year T-bond is another factor in the strong demand for the seven-year T-bond.

Meanwhile, De Leon maintained that debt swap remains among the government’s options to manage its liabilities.

She declined to say when the government will do its next liability management practice saying this depends on the timing and several other factors.

She, on the other hand, said that debt with long-term tenors are sure candidates for the debt swap. (PNA)