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By Chino S. Leyco, Reporter
THE government failed to secure five-year
borrowings, after it rejected all bids for the Treasury bonds with
the said maturity on Tuesday.
The Bureau of Treasury said investors were
seeking higher yields following the government’s announcement that
inflation rose to a three-year high last month.
The Treasury bureau had planned to sell P7-
billion worth of T-bonds but banks were willing to buy P8.39 billion
of the debt papers if the government agreed to an 8.534-percent
discount.
“It’s too high relative to the secondary
market. The one acceptable to us is the rate before the trading,
which is 8.075 percent. The market is still in shock of the 8.3
percent inflation rate,” Finance Undersecretary Gil Beltran told
reporters after the auction.
The bond had fetched an average yield of 6.568
percent when it was last auctioned on March 11.
Beltran said that despite the rejection the
government still has a strong cash-position, adding the bureau gets
placements over the counter.
The finance official said future rates will
depend on oil and rice price developments.
“As long as the prices of rice and oil are up,
[a high rate is] something beyond our control,” he said.
Bangko Sentral ng Pilipinas Gov. Amando Tetangco
Jr. said inflation last month was higher than expected but prices
should start cooling soon.
“As base effects dissipate and as measures to
stabilize supply take root, we remain convinced that price movements
will return to manageable levels over the policy horizon,” he said
in a text message to reporters.
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