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By Maricel E. Burgonio, Reporter
INVESTORS on Tuesday demanded higher rates for
government IOUs maturing in seven years after the Bangko Sentral ng
Pilipinas (BSP) projected higher inflation until the third quarter
this year.
At an auction, investors bid up the seven-year
Treasury bond rate to 8.375 percent, higher than the 6.5 percent the
debt paper fetched last November.
“The market has factored in the BSP’s
forecast that high inflation will persist until September,”
Finance Undersecretary Roberto Tan, who is also acting national
treasurer, told reporters.
“It’s within the secondary market levels,”
he said.
The BSP’s warning came on the heels of April
data showing price increases accelerated to a three-year high of 8.3
percent that month, breaching the central bank’s forecast of 6.4
percent to 7 percent for the period. The April figure brought the
four-month average to 6.2 percent, or way above the government
full-year target of between 3 percent and 5 percent.
Banks bid for P11.320 billion worth of the
T-bonds, but the government accepted only P7 billion of the tenders.
For the second quarter, the Bureau of Treasury
set a monthly T-bond offering of P14 billion for a total of P42
billion.
Last week, the one-year T-bill rate rose to
6.915 percent on the same inflation concerns. The treasury bureau
halted the regular auction of shorter-dated T-bills and resorted to
negotiated sales with financial institutions.
Tan said the government plans to issue retail
treasury bonds (RTBs) to finance P33 billion worth of maturing
obligations in July.
The Philippines last offered RTB’s in July
last year, selling P50 billion worth of three-year and five-year
debt papers. It had planned to sell only P40 billion of the IOUs.
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