Inquirer: Buyers scramble to buy 20-year treasury bonds; P8.5 billion raised

MANILA, Philippines — The government raised on Tuesday P8.5 billion from the sale of 20-year treasury bonds and has opened a tap facility to double the amount as buyers scrambled for long-term debt paper.

The yield on the 20-year securities fell 20.8 basis points to an average 8.521 percent during Tuesday’s auction.

Buyers flooded the offer with tenders totaling P20.92 billion, or more than twice the original offer.

With the favorable yield, National Treasurer Roberto B. Tan said buyers could avail themselves of another P8.5 billion over the counter through the tap facility.

Tan said transactions made through the tap facility might be settled from 9 a.m. to 3 p.m. on Wednesday.

Asked if the auction results indicated investor confidence in the newly installed Aquino administration, the Treasury chief said “yes.”

Tan said the results also showed investor sentiment on reports of good economic fundamentals, referring to the 3.9-percent inflation rate recorded in June.

Also adding to the market’s liquidity was some P1.5 billion worth of maturing treasury bills this week.

The Bureau of the Treasury has announced that it plans to issue P107.5 billion worth of government securities in the third quarter, about 3 percent less than the planned borrowing of P110.5 billion in the same period in 2009.

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About Benedict Bernabe

Benedict Bernabe, 27. Benedict has a Master's degree in Development Studies from the University of Melbourne, Australia and a Bachelor of Arts degree in European Languages, cum laude, from the University of the Philippines Diliman. He has worked with the United Nations in the Philippines as the Community Facilitator of the Community of Practice on HIV&AIDS. He worked with Standard & Poor's Capital IQ, a financial information company, as researcher, translator and quality analyst in the investment research team. Prior to this, we worked at IBM Business Services. Benedict is a certified yoga teacher.

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