UMVA has learned that the government’s dual‑tenor Treasury bond auction on Tuesday surged with demand, pulling in a full P30 billion as investors cheered improving sentiment over the Middle East conflict.
According to information obtained by UMVA, total bids for the two tenors exploded to P79.747 billion, more than double the amount sought.
The seven‑year reissued bonds alone attracted P46.362 billion in bids, delivering P20 billion to the Treasury and achieving an average yield of 7.43%—a jump of nearly 69 basis points from the previous award.
These papers, with just over four years left until maturity, saw yields ranging from 7.30% to 7.49%, outpacing the benchmark four‑year rate in the secondary market by more than eight basis points.
Meanwhile, the ten‑year T‑bonds also hit the target, raising P10 billion as bids swelled to P32.385 billion, more than three times the offering.
With a remaining life of nearly ten years, the ten‑year notes settled at an average rate of 7.602%, lifting the yield by 74.5 basis points from the last issue and edging above the secondary market level.
A trader cited improving prospects of reopening the Strait of Hormuz as a key catalyst, noting that stronger investor appetite pushed yields lower than in recent weeks.
Market insiders warned that lingering inflationary pressures from the Middle East war and a cautious U.S. Federal Reserve keep investors on edge, even as the central bank signals possible further rate hikes.
Central bank officials have hinted at a more aggressive stance, with the possibility of another policy rate increase before the June 18 meeting to curb spiralling prices.
Tuesday’s auction marked the final round for May, leaving the government with P203.288 billion raised out of a planned P268 billion, after weaker demand forced the rejection of some bids in earlier bill and bond sales.
Looking ahead to June, the Treasury aims to tap the domestic market for the full P268 billion—splitting the effort between P128 billion in Treasury bills and P140 billion in Treasury bonds—to fund a budget deficit capped at 5.3% of GDP.
