THE GOVERNMENT made a full award of Treasury bonds (T-bonds) it offered on Tuesday as the tenor’s average rate was lower than the level at the secondary market.

The Bureau of the Treasury (BTr) borrowed P35 billion as planned via the fresh 10-year securities it auctioned off on Tuesday. Total tenders reached P72.24 billion, or more than double the initial offer.

The 10-year notes fetched a coupon rate of 4.875%, lower than the 4.8795% quoted for the tenor at the secondary market before the auction, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

Because of the strong demand and the low rate, the bureau opened the tap facility to raise another P5 billion via the papers.

National Treasurer Rosalia V. de Leon in a Viber message to reporters said the BTr made a full award due to the oversubscription at more than twice the offer volume and as the rate was lower than those quoted in the secondary market.

Investors “defied fears” of the US Federal Reserve’s planned rate hikes, she said.

“Thanks to Gov (Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno) assuaging market he won’t hike until economy on solid recovery path. And they need to deploy liquidity. Inflation concerns have also eased,” Ms. De Leon added.

US Federal Reserve Governor Lael Brainard last week said rate hikes could start as soon as the US central bank ends its bond purchases, which is set for March.

Meanwhile, Mr. Diokno last week said the BSP is unlikely to hike benchmark rates in the first half of this year as it waits for the economic recovery to become entrenched and unemployment to fall.

The Philippines’ key interest rate has been at a record low 2% for more than a year, withstanding mounting inflation in 2021. Ample foreign exchange reserves and manageable government debt provide some cushion against tighter financial conditions worldwide, Mr. Diokno said in a Bloomberg interview.

A trader said the Treasury made a full award of its bond offer as the average rate was within expectations.

“Good auction as BTr was finally able to fully award bonds,” a bond trader said. “The coupon rate is within expected levels.”

The Treasury bureau rejected all bids for T-bonds it offered in December and its first T-bond auction for this year. Last week, it partially awarded reissued five-year T-bonds.

The BTr plans to raise P200 billion from the domestic market this month, or P60 billion via Treasury bills and P140 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit seen to hit 7.7% of gross domestic product this year. — Jenina P. Ibañez