By Aaron Michael C. Sy, <\/b>Journalist <\/i><\/p>\n
THE GOVERNMENT secured an <\/span>initial P135 billion from the issuance of its new 10-year fixed-<\/span>rate Treasury notes it auctioned on Tuesday utilizing <\/span>a novel issuance format aimed at institutional participants.<\/p>\n The amount collected was over four times the starting P30-billion offering, with bids totaling P197.3 billion, as stated by the Bureau of the Treasury (BTr) after the auction.<\/p>\n The new Treasury bonds (T-bonds) attained a coupon rate of 6.375%, leading to an average rate of 6.286%, according to the results from the rate-setting auction available on the Treasury\u2019s website.<\/p>\n Accepted bid yields were between 6% and 6.4%.<\/p>\n The coupon rate was 10.37 basis points (bps) above the 6.2713% observed for the 10-year notes based on PHP Bloomberg Valuation Service Reference Rates data as of April 15 published on the Philippine Dealing System\u2019s website prior to the auction.<\/span><\/p>\n The BTr will maintain the offering of the notes to eligible dealers until April 24, with a minimum investment requirement of P10 million and increments of P1 million thereafter.<\/p>\n The issuance date for the notes maturing in 2035 is planned for April 28.<\/p>\n \u201cThe prolonged offer timeframe will enable a greater volume than our typical auction, ensuring liquidity,\u201d National Treasurer Sharon P. Almanza conveyed in a Viber message.<\/p>\n The Treasury noted that the extended offer period is unprecedented for a nonretail bond issuance, as it \u201caims to establish a new pathway for developing liquid benchmarks.\u201d<\/span><\/p>\n \u201cDemand was robust. Investors are eager to [purchase] as inflation remains low, which could prompt further rate reductions, making the rate appealing,\u201d a trader mentioned via phone.<\/span><\/p>\n The trader remarked that the coupon rate aligned with market expectations, being comparable to secondary market rates.<\/span><\/p>\n The Monetary Board resumed its easing cycle last week, reducing the target reverse repurchase rate by 25 bps to 5.5%. Rates on the overnight deposit and lending facilities were also decreased to 5% and 6%, respectively.<\/p>\n Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. indicated that anticipations of reducing inflation bolster the transition to a more accommodating monetary policy stance, mentioning that they are contemplating additional rate cuts this year in \u201cincremental steps\u201d of 25 bps at a time.<\/p>\n Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort articulated in a Viber message that the coupon rate corresponded with the recently elevated 10-year US Treasury yield attributed to the Trump administration\u2019s tariff policies.<\/p>\n \u201cI believe the volume is favorable for BTr as it provides them with a buffer. We see this as nearing their target volume. This alleviates pressure on shorter tenors, particularly for five years and below,\u201d another trader stated in a text message.<\/span><\/p>\n The BTr could gather up to P200 billion from this offering to align with maturities this month estimated at around P170 billion, and in anticipation of large maturities in August, the trader further noted.<\/p>\n