BTr raises P35 billion from strong demand for T-Bonds

The Bureau of the Treasury (BTr) successfully raised PHP35 billion from its latest auction of three-year and 25-year Treasury bonds (T-bonds) on Tuesday, signaling sustained investor confidence despite market uncertainties.

The three-year T-bond, with a remaining term of three years and 26 days, fetched an average rate of 5.779 percent, lower than the comparable three-year PHP Bloomberg Valuation Service (BVAL) yield of 5.83 percent as of March 24. The auction attracted total bids of PHP41.48 billion, though the Auction Committee capped the award at PHP10 billion to manage yields.

For the longer-term offering, the 25-year T-bond drew PHP33.8 billion in bids and settled at an average yield of 6.476 percent, slightly higher than the 6.30 percent reference rate. The committee awarded PHP25 billion, reflecting continued appetite for long-term securities despite heightened market risks associated with extended maturities.

Rizal Commercial Banking Corporation chief economist Michael Ricafort noted that shorter-dated tenors are more attractive to investors due to lower market risks. “Holding long-end bonds, such as the 25-year, exposes investors to potential volatility if interest rates rise. Some elderly investors, for example, may prefer shorter terms to align with their investment horizon,” Ricafort explained.

The strong demand for both tenors highlights confidence in the country’s fiscal stability while providing the government with resources for key expenditures and infrastructure projects.