The Philippine central bank raised P100 billion through short-term securities it auctioned off on Friday, as rates dropped after the government finished its dollar bond sale.
The Bangko Sentral ng Pilipinas (BSP) fully awarded the 28-day bills it offered from total bids worth P158.2 billion, making the offer nearly two times oversubscribed.
The demand was 17% higher than P135.74 billion in total tenders last week.
The short-term debt fetched an average rate of 1.812% from 1.816% at the previous auction.
Investors sought rates from 1.78% and 1.824%, lower than last week’s 1.8-1.835%.
The rates corrected on Friday after rising for four straight weeks, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. said in a Viber message.
He said players had factored in the recent offshore bond issuance by the government, where it sold $3 billion via its dual-tranche offering of dollar-denominated bonds.
This meant there is less pressure for the government to raise more funds locally for the meantime to finance the budget deficit, he added.
The Philippines sold $2.25 billion via 25-year dollar bonds on Tuesday and $750 million in 10.5-year notes.
This marked the country’s third offshore bond offering this year, after the $2.5 billion worth of euro-denominated notes it sold in April and $500 million yen-denominated Samurai bonds issued in March.
The government is planning to raise $7 billion from the international debt market this year to help fund its budget deficit that is expected to widen to 9.3% of economic output.
Mr. Ricafort said the higher demand showed there is excess liquidity in the financial system. — Beatrice M. Laforga