10-year bond rate at 8.875%

Jul	04
2009

abs-cbnNEWS.com | 11/19/2008 2:53 PM

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The Bureau of the Treasury on Tuesday sold only P1.25 billion out of its planned P6.0 billion 10-year Treasury bond offering after it rejected most bids because they were too high.

The interest rate on the bonds was 8.875 percent, 1.648 percentage points higher than the 7.227 percent at the auction held on March 25. Tenders reached P6.5 billion, slightly oversubscribed.

Had the Treasury accepted all bids, the bonds would have fetched 9.07 percent, an over two percentage point-rise from the earlier rate.

The government said it still has a comfortable cash position and can afford to reject bids or make partial awards.

It said the recent bond auction saw panic-stricken banks, which were pushing for yields that were higher than the levels of the secondary market.

The government said market players remain cautious and opt to hold on to their cash amid uncertainties in the global financial markets.

The Bangko Sentral ng Pilipinas is scheduled to meet on Thursday to decide on its key policy rates. The market expects the central bank to keep its key interest rates steady.

as of 11/19/2008 2:53 PM