20-year T-bond rate falls to record low

The yield for 20-year treasury bonds fell to a record low of 3.625 percent at Tuesday's auction, 212.5 basis points lower than the previous record of 5.75 percent achieved last September. “This is definitely a record low, but it's not surprising; rates have been going down,” said Deputy Treasurer Eduardo Mendiola. “There's so much liquidity out there actually running after papers.” Tenders for the debt paper reached P118.334 billion, more than four times the P25 billion offered by the government. Mendiola added that the government will stick to its borrowing program for the second quarter. "We've already announced our second quarter issuances, and we will stick to that program," he said. For the second quarter, the government plans to borrow P150 billion from the local debt market, 25 percent up from the sum it planned to borrow in the first quarter. The Bureau of the Treasury issued a memorandum circular on Monday raising its monthly treasury bill sale to P20 billion from the current P15 billion and its monthly treasury bond offer to P30 billion from P25 billion. This means the government will offer P60 billion worth of T-bills in total over auctions to be held on April 3, May 8 and June 5, and P90 billion worth of T-bonds in auctions on April 25, May 23, and June 20. — BM, GMA News