The government completed a full award of reissued Treasury bonds offered on Tuesday, achieving a lower average yield as declining oil prices and prospects of a Middle East peace deal eased inflation concerns.
The Treasury borrowed 30 billion pesos through seven‑year bonds, receiving total bids of 65.135 billion pesos—more than twice the amount on offer.
Outstanding volume of this bond series now stands at 243 billion pesos. The successful subscription underscores investor confidence in sovereign debt.
The issue was awarded at an average rate of 6.58%, with accepted yields ranging from 6.50% to 6.61%, lower than the previous award.
The average rate fell by 72.7 basis points from the 7.307% rate of the June 9 award and is 42 basis points below the bond’s 7% coupon.
Nevertheless, the rate is slightly above recent market levels, exceeding the 6.548% rate for the same series and the 6.501% quoted for the comparable three‑year benchmark in the secondary market.
Strong demand and a lower yield reflect expectations that inflation pressures will ease as global oil prices retreat and diplomatic talks between the United States and Iran progress.
Spreads tightened relative to prior weeks, aided by the shorter tenor of the bonds and limited morning market activity that kept yields stable.
Oil prices fell about 1% on Tuesday, with Brent crude at $72.4 per barrel and WTI at $70.18, levels approaching pre‑war figures and supporting the bond market outlook.
Negotiations in Doha aim to revive talks between the United States and Iran, though recent missile exchanges have tested the interim ceasefire in the regional conflict.
The Treasury’s monthly domestic financing target is 410 billion pesos, split between 250 billion pesos in Treasury bills and 160 billion pesos in Treasury bonds.
Borrowing from both local and foreign sources helps fund the budget deficit, projected at 1.659 trillion pesos, equivalent to 5.4% of GDP for the year.
