Three-year interest rate rises (Sabong News)
Author
Chino S. Leyco
Date
MAY 04 2022
The benchmark interest rate on debt falling due in three years rose at an auction of government IOUs at the Bureau of the Treasury.
Investors were willing to buy as much as P41.492 billion of the three-year Treasury bonds, more than the government’s offer of P35 billion.
The rate of the IOUs rose to 4.598 percent from 4.21 percent during the April 5 auction. The bureau made a full award of its P35 billion offer.
The yield is also above the 4.38 percent fetched in the secondary market, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates published on the Philippine Dealing System’s website.
After auction, National Treasurer Rosalia V. de Leon said the government made a full award despite higher interest rates owing to “significant developments” domestically and abroad.
“Markets bracing for hawkish pivot from US Federal Reserve with 50 basis points rate hike in tandem with balance sheet reduction to battle inflation,” de Leon told reporters.
“Onshore, inflation forecast for April is 4.6 percent and BSP [Bangko Sentral ng Pilipinas] has issued warning that it may start hiking this June. Interestingly, in 2018 when inflation hovered at 4.6 percent, three-year rate was at 4.79 percent,” she added.
