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THE
yield for the seven-year Treasury bonds rose to 8.375
percent from 6.5 percent in November when it was last
offered, according to results of the auction yesterday.
The
bureau awarded the full allotment of P7 billion pesos,
and the debt paper was oversubscribed with P11.32
billion in tenders. Yield offers ranged from a high of
8.375 percent and a low of 7.975 percent.
Finance
Undersecretary Roberto Tan said the acceptance rate was
aligned with the secondary market rates of 8.5 percent
to 8.6 percent.
“The
market has already factored in on the BSP [Bangko
Sentral ng Pilipinas] forecast that [soaring] inflation
will persist until September. But the yield we accepted
are within secondary market levels,” he told reporters
after the auction.
A bond
trader from a commercial bank, who requested anonymity,
said the market initially expected a rejection,
believing the government has a comfortable cash position
because of the budget surplus last month. The government
posted a P25.8-billion budget surplus in April.
“The
players were expecting a rejection because of the high
budgetary surplus, so many placed bids at high rates, so
there was momentum,” the trader said.
Tan said
the award was meant to keep the market moving rather
than the need generate funds. “It’s more of the need to
provide supply rather than because of need.”
He noted
than in July the government has P33 billion worth of
maturing bonds.
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