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Peso GS Weekly: Philippine government bond yields end lower near 6%
Short-term bonds see faster decline in yields, creating a steeper yield curve
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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WHAT HAPPENED LAST WEEK
The local government securities (GS) market started the week on track with selling activity seen across the board as US Treasuries and the USD/PHP exchange rate grinded higher. However, this quickly reversed as weaker-than-expected economic data from both the local and global front pushed GS yields lower to close the week.
The highlight of the week was the local August Consumer Price (CPI) Index print, which showed a soft figure of 3.3% vs the 3.6% Bloomberg estimate. In terms of primary auctions, the Bureau of the Treasury (BTr) concluded its auction of the 3-Year bond, Fixed Rate Treasury Note (FXTN) 20-14, at an average of 6.025% and a high of 6.05%, or just within market indications. However, response to the auction was weak due to mild results.
Meanwhile, the 1