10-year T-bond rate fetches 5.893% as BTr awards P107-B

The Bureau of the Treasury (BTr) set the average rate for its 10-year fixed-rate Treasury note (FXTN) at 5.893% during a recent auction.

Although the BTr offered ₱300 billion worth of the debt paper, it awarded only ₱107.07 billion out of ₱328.47 billion in total tenders.

National Treasurer Sharon Almanza said there are no plans to match last year’s ₱300-billion issuance of the same tenor, noting that borrowings will depend on funding needs for the current and next quarter.

“This will complete, part of our financing, for the year. So, definitely, we’re not aiming for ₱300 (billion),” she said.

Almanza added that the government intends to issue the FXTN only once this year as part of efforts to consolidate issuances and avoid fragmenting the yield curve.

Aside from the new money component, the offering includes a bond switch option, allowing holders of older government securities to swap them for the newly issued 10-year bonds.

In an advisory, the BTr said it would no longer accept new money subscriptions “amidst the strong demand received during the first day of the public offer period,” but will continue to accept eligible bonds for swapping until noon of Feb. 20.

The government’s total borrowing program for the year is projected at ₱2.68 trillion, with about ₱2.05 trillion to be sourced domestically and ₱627.1 billion from external financing.