The Bureau of the Treasury (BTr) made full award of its reissued 7-year Treasury bond worth P30 billion on Tuesday after its average rate increased following the arrest of former President Rodrigo Duterte.

The BTr reported the average rate rose to 6.143 percent from 6.096 percent of the comparable bond offered in the secondary market last 10 March and from 5.973 percent seen last 11 February.

The reissued bond drew total bids amounting to P81.761 billion, which represented 2.7 times oversubscription and was higher than the P67.611 billion recorded last month.

The bond has a remaining life of seven years and six months.

To raise more funds from oversubscription, the BTr also decided to activate the tap facility which will allow the government agency to resell a portion of the bond under more favorable economic conditions.

Uncertainties intensified

Rizal Commercial Banking Corp. chief economist Michael Ricafort said investors’ sentiment about uncertainties might have intensified after former President Duterte was arrested at the Ninoy Aquino International Airport on Tuesday for cases on human rights violations linked to killings under his anti-illegal drugs campaign.

The rate rose exactly a month ago, amid the latest political noise related to the arrest of former President Duterte and uncertainties related to Trump’s tariff threats, the economist said.

However, Ricafort said local Treasury rates might decline in the future to narrow the gap with the policy rate of the Bangko Sentral ng Pilipinas which projects manageable inflation risks in the near term.

“The lower inflation at 2.1 percent in February could increase the possibility of a 25-basis point BSP rate cut as early as April 10,” he said.

Currently, the BSP imposes 5.75 percent.