The government once again fell short of its borrowing target on Tuesday as investors demanded higher returns, prompting the Bureau of the Treasury to make only a partial award at its latest Treasury bond auction.
The Auction Committee raised just P5.56 billion from its offering of dual-tranche reissued Treasury bonds, well below the original P40-billion program for the day.
Demand remained cautious across both tenors. All P13.35 billion in bids for the three-year Treasury bond were rejected, reflecting investors’ reluctance to lock in funds at rates they deemed too low. Had the issue been fully awarded, the three-year bond would have fetched an average yield of 6.819 percent.
For the 25-year bond, the government accepted P5.65 billion out of total tenders worth P13.76 billion, with the average rate settling at 7.400 percent.
Analysts said the weak auction result was hardly unexpected, as investors continue to navigate an environment marked by global uncertainty and persistent inflation concerns.
“This isn’t surprising. Investors are still cautious and are demanding higher yields amid global uncertainty and sticky inflation risks,” said Jonathan Ravelas, senior adviser at Reyes Tacandong & Co.
He added that the Treasury’s decision to reject expensive bids reflects prudent debt management rather than weakness in demand.
“If rates stay elevated and volatility persists, we may continue to see partial awards in the coming weeks. What matters is that the government is not forced to borrow at unfavorable rates — better to be disciplined now than lock in expensive debt,” Ravelas said.
