THE GOVERNMENT made a full award of the Treasury bonds (T-bonds) it offered on Tuesday as it saw strong demand, with investors flocking to fixed-income assets as the Trump administration’s shifting policies continue to stoke volatility in global markets.
The Bureau of the Treasury (BTr) raised P30 billion as planned via the reissued 10-year bonds it auctioned off as total bids reached P71.71 billion or more than twice the amount on offer.
This brought the total outstanding volume for the bond series to P395.6 billion, the Treasury said in a statement.
The bonds, which have a remaining life of seven years and four months, were awarded at an average rate of 6.081%. Accepted bid yields ranged from 6% to 6.095%.
The average rate for the reissued papers went down by 6.2 basis points (bps) from the 6.143% fetched for the series’ last award on March 11 and was also 66.9 bps lower than the 6.75% coupon for the issue.
However, this was 2 bps above the 6.061% quoted for the seven-year bond and 4.7 bps higher than the 6.034% seen for the same bond series at the secondary market before Tuesday’s auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.
The government fully awarded the reissued T-bonds as the offer was more than twice oversubscribed and as the average yield fetched was lower than the rate quoted for the series’ previous reissuance, the Treasury said.
The bond offer fetched strong demand and yields slightly higher than prevailing secondary market rates due amid “increased preference of many investors toward fixed-income securities amid short-term market jitters from policy pronouncements by US President Donald J. Trump,” a trader said in an e-mail.
Investor attention has been on the possibility of easing trade tensions between the US and China after Beijing last week said it was evaluating an offer from Washington to hold talks over tariffs, Reuters reported.
But with few details, investors have been left trying to make sense of headlines coming out of the White House.
Mr. Trump said on Sunday that Washington is meeting with many countries, including China, and that his main priority with China is to secure a fair deal.
Mr. Trump also on Monday slapped a 100% tariff on movies produced outside the United States but offered little clarity on how the levies would be implemented.
US Treasury Secretary Scott Bessent on Monday said Mr. Trump’s tariff, tax cut and deregulation agenda would work together to drive long-term investment to the US economy, adding that US financial markets were “anti-fragile” and would weather any short-term turbulence.
Mr. Bessent, in prepared remarks to the Milken Institute Global Conference in Los Angeles, delivered a full-throated defense of Mr. Trump’s tariffs but emphasized the Republican tax bill working its way through Congress, saying it would make many parts of the president’s first-term tax cuts permanent, including a deduction for small businesses.
Mr. Bessent said that Mr. Trump’s tariff blitz since taking office for a second time on Jan. 20 was engineered to encourage companies like those attending the conference to invest in the US, build factories and make products in the US.
In a subsequent interview with CNBC television, Mr. Bessent said that he believed these policies could push US growth close to 3% by this time next year, which would help to bring down US budget deficits to their long-term average share of economic output.
The US economy contracted for the first time in three years in the first quarter amid a flood of imports to beat Mr. Trump’s tariffs, and the International Monetary Fund has forecast that US gross domestic product will grow only 1.8% in 2025.
The reissued T-bond’s average yield was a tad above the comparable secondary market yields after the BTr’s recent issuance of P300 billion in new 10-year benchmark fixed-rate Treasury notes siphoned off some excess peso liquidity from the market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.
The BTr plans to raise P260 billion from the domestic market this month, or P100 billion via Treasury bills and P160 billion through T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of gross domestic product this year. — A.M.C. Sy with Reuters
