The Bureau of the Treasury (BTr) on Tuesday made full award of its P30-billion reissued seven-year bonds as their average rate declined amid projections of lower interest rates from the Bangko Sentral ng Pilipinas.

The BTr said the bond auction drew total bids amounting to P69.1 billion or 2.3 times bigger than the government's programmed offer.

The bonds, with a remaining term of four years and eight months, fetched an average rate of 6.058 percent during the Tuesday auction, down from 6.107 percent posted last month when the bonds were also issued.

As of yesterday, the BTr said the government incurred a total outstanding volume for the series amounting to P219.7 billion.

Less risk from inflation

Rizal Commercial Banking Corporation chief economist Michael Ricafort said the lower bond rate indicated investors' expectations of less risks from inflation.

"Local inflation eased to a seven-month low of 3.3 percent in August or reverted to the two to four percent inflation target of the Bangko Sentral ng Pilipinas," he said.

Ricafort added that the recent peso performance against the US dollar signaled stable prices of most goods and services.

Stronger peso exchange rate

"We saw a relatively stronger peso exchange rate versus the US dollar which was among the strongest in five months, while global crude oil prices were among 14-month lows," he said.

The local currency on Tuesday appreciated again to P56.385 against the dollar after weakening to P56.52 per dollar on Monday.