The Bureau of Treasury (BTr) on Tuesday allowed the three-year Treasury bond (T-bond) rate to move up and sold all P15 billion worth of reissued IOUs with remaining shelf life of two years and 11 months due to the strong and healthy demand from the market.
The three-year T-bond rate was allowed to rise by 11.5 basis points to 3.492 percent, from an earlier rate of only 3.375 percent on the back of a highly liquid market.
The auction committee received more than double in tenders amounting to P33.979 billion for the IOU’s and in the end rejected P18.979 billion. According to newly sworn in National Treasurer Rosalia V. de Leon, the bids were in line with secondary market rates.
“Well, we have a strong and healthy demand from the market. The bids that were submitted were in line with the secondary market rates right now for the security. So the committee made a full award during the auction,” de Leon told financial reporters.
The average rate for the set of T-bonds with an original three-year tenor stood at 3.492 percent, or higher compared to the average rate for the previous auction for the set of T-bonds with 3.364 percent.
The coupon rate from Tuesday’s auction stood at 3.375 percent.
“I hope this continued strong participation from the market would be there during the succeeding auctions of the Treasury. We are also discussing with them in terms of appetite for the succeeding auctions as we move forward with the funding program for the rest of the year,” she quickly added.
De Leon also bared innovative and technological changes that will be pursued by the BTr, including the validation of the Registry of Scriptless Securities (RoSS) program and the implementation of a repurchase agreement or repo program.
“For the RoSS, I think we made good progress on that, since we started two years ago and we have a timeline. We are now in the process of validating the outcomes and eventually doing some test runs, as well. On the repo, I am discussing individually with the regulators,” de Leon said without elaboration.