THE GOVERNMENT made a full award of its dual-tranche offering of Treasury bonds (T-bonds) on Wednesday at lower yields before an expected rate cut by the Bangko Sentral ng Pilipinas (BSP).

The Bureau of the Treasury (BTr) raised P35 billion as planned via its dual-tenor T-bond offer as total bids reached P128.332 billion, or more than triple the amount placed on the auction block.

Broken down, the Treasury borrowed the programmed P15 billion via the reissued seven-year bonds, with total bids reaching P93 billion or more than four times the amount on offer.

The bonds, which have a remaining life of two years and seven months, were awarded at an average rate of 5.634%. Accepted yields ranged from 5.62% to 5.648%.

The average rate of the reissued papers went down by 18.3 basis points (bps) from the 5.817% fetched for the series’ last award on July 22, but was 200.9 bps above the 3.625% coupon for the issue.

This was also 7.4 bps below the 5.708% fetched for the same bond series and 9 bps lower than the 5.724% quoted for the three-year bond — the benchmark tenor closest to the remaining life of the issue — at the secondary market before Wednesday’s auction, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the BTr.

Meanwhile, the government also raised P25 billion as planned from the reissued 25-year T-bonds, with total bids for the tenor reaching P35.332 billion.

The notes, which have a remaining life of 24 years and five months, were awarded at an average rate of 6.374%. Accepted yields ranged from 6.3% to 6.41%.

The average rate went down by 27.5 bps from the 6.649% fetched for the series’ last award on June. 25 and was also 0.1 bp lower than the 6.375% coupon for the issue.

However, this was 6 bps above the 6.314% seen for the same bond series and 2.7 bps higher than the 6.347% quoted for the 25-year bond at the secondary market before Wednesday’s auction, PHP BVAL Reference Rates data showed.

Both T-bond tenors offered on Wednesday fetched lower rates amid expectations of a rate cut by the BSP on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Both bonds’ yields fell significantly compared to their previously traded averages, which is another instance of the market preparing for the BSP’s anticipated rate cut tomorrow,” a trader likewise said in a text message.

A BusinessWorld poll conducted last week showed all 20 analysts surveyed expect the Monetary Board to cut the target reverse repurchase rate by 25 bps to 5% on Thursday. If realized, this would be the third straight 25-bp reduction since April.

The BSP has slashed benchmark borrowing costs by a cumulative 125 bps since it kicked off its easing cycle in August 2024.

Mr. Ricafort said the T-bonds’ yields eased amid strong investor demand.

“[The reissued seven-year bond] was met with much higher demand compared to the [25-year bond], indicating a clear preference for shorter tenor instruments at the moment,” the trader added.

Expectations of a US Federal Reserve cut next month also helped drive bond yields lower, Mr. Ricafort added. — A.M.C. Sy

HEALTH maintenance organizations’ (HMO) combined net income surged by 131.12% year on year in the first half as they posted higher revenues.

The sector’s net profit went up to P1.47 billion in the first semester from P636.6 million in the same period last year, data from the Insurance Commission showed.

“Despite the big increase in the payout of healthcare benefits, the HMO industry continued its return to profitability due to higher revenues,” the regulator said.

The sector’s total revenues climbed by 21.36% to P47.03 billion in the first six months from P38.754 billion last year.

This was driven mainly by a 25.23% increase in membership fees to P45.79 billion from P36.57 billion.

Meanwhile, HMOs’ total expenses went up by 19.53% year on year to P45.56 billion in the period. This came as total benefits and claims paid out by the industry rose by 19.63% to P36.29 billion.

The industry’s total assets grew by 21.14% to P83.91 billion at end-June from P69.27 billion a year prior.

Of this, P18.23 billion were invested assets, 13.15% lower than the P20.99 billion recorded last year due to the “maturity of cash equivalents, with net decrease of 25.87%, or P2.51 billion, during the first half.”

Meanwhile, total liabilities increased by 23.88% year on year to P72.25 billion in the first six months from P58.32 billion.

Total equity was up by 6.57% to P11.66 billion from P10.94 billion.

INSURERS’ ASSETS
Meanwhile, the combined net income and assets of both the life and nonlife insurance sectors also rose in the first half, separate data released by the IC showed.

The life sector’s total net income increased by 4.05% to P20.72 billion driven by the 12.01% growth in premiums collected to P195.05 billion. 

Life companies’ new business annual premium equivalent also increased by 11.29% to P37.01 billion.

Their combined assets expanded by 7.74% to P1.995 trillion at end-June from P1.85 trillion a year ago.

Total invested assets climbed by 11.89% to P1.93 trillion. Total net worth also rose by 8.77% to P287.72 billion.

Meanwhile, total liabilities went up by 7.57% to P1.71 trillion.

The sector’s paid-up capital increased by 8.4% to P35.19 billion in the six-month period from P32.36 billion.

For the nonlife insurance sector, its combined net income rose by 2.71% to P5.12 billion in the first six months from P4.98 billion in the same period last year.

This came even as total claims paid out by companies grew by 32.67% year on year to P15.69 billion.

Meanwhile, nonlife insurers’ total premiums earned climbed by 20.63% to P37.08 billion in the first half from P30.74 billion a year ago.

Net premiums written (NPW) grew by 20.48% year on year P39.63 billion.

“As in previous reporting periods, the motor car business remained the leading contributor, accounting for 40.52% of total NPW. It registered a 16.2% increase, equivalent to P2.24 billion, growing from P13.82 billion to P16.06 billion,” the IC said.

Gross premiums written also rose by 9.92% to P65.599 billion in the first half from P59.68 billion a year ago.

The nonlife sector’s total assets went up by 5.72% to P377.21 billion at end-June from P356.8 billion.

Of this, P184.51 billion were invested assets, up by 5.54% from P174.83 billion.

The industry’s combined net worth was at P137.97 billion in the first half, rising by 8.98% year on year from P126.599 billion.

On the other hand, nonlife insurers’ liabilities increased by 3.93% to P239.25 billion from P230.2 billion.

Total paid-up capital went up by 7.77% to P48.47 billion from P44.98 billion. — A.M.C. Sy