Strong demand prompts full award on T-bond

We want to give importance to the recreational boat-building industry, from manufacturing to operation to management.

Strong demand unleashed by the flood of liquidity in the market marked the sale of three-year Treasury bonds (T-bond) by the Bureau of Treasury (BTr) on Tuesday.

As a result, the auction committee awarded all bids in full and reopened the tap facility to capture the excess bids.

National Treasurer Rosalia de Leon expressed her satisfaction with the result of the bond sale.

“Nice to end the 2019 auction on a high note. Lower rates, close to three times subscription and we’ll open the tap for P20 billion,” De Leon told reporters.

According to her, this development may be traced to the recent cuts made by the Bangko Sentral ng Pilipinas in the banks’ reserve requirement ratio (RRR) which released a flood of liquidity in the market. This adds to expectations of another round of easing in key policy rates.

The yield for the reissued three-year benchmark averaged 3.742 percent, a 25.4 basis point improvement from the previous 3.996 percent. Also, the latest rate for the bond proved better than the secondary market rate of 3.928 percent.

The BTr raised the full P20 billion target after having attracted a total P59.66 billion worth of tenders, or an oversubscription of the original amount nearly three times.

“I think going into early next year there will still be a flush of liquidity and then given that inflation outlook continues to be benign, I think the trend will (continue) up to the belly of the curve, the intermediate part of the curve. I think that’s the sweet spot right now and that’s what we saw also in this auction,” she said.