The government rejected all bids for its long-term debt papers on Tuesday, Dec. 14, after investors sought higher yields.

National Treasurer Rosalia V. De Leon said there is more room for yields to decline following deceleration in inflation last month and assurance from the central bank governor to hold interest rates steady.

“Market has not sufficiently incorporated priced in that inflation will be back within the target as supply disruptions are addressed,” de Leon told reporters after the auction.

“Market would also be looking for US Fed signal whether it will start early on rate liftoff and pace of taper. On domestic front, they will be watching on December inflation print and results of MB [Monetary Board] policy meeting this Thursday,” she added.

The government junked investors’ clamor for a 4.345 percent yield for the seven-year IOU. The amount of bids for the debt paper reached P52.267 billion, more than double the P20 billion on offer.

Source: Manila Bulletin (