Under government’s P55 billion domestic note issuance programme, the BoB floats bonds and Treasury Bills (TB) each month to raise debt for government in the capital market. At the auctions, primary dealers, who are exclusively banks, compete to lend to the Government by offering the yields or returns they are seeking.
Publicly available data show that both the actual yields and the demands for yields at each monthly auction have been rising sharply this year, due largely to the sovereign credit downgrades, the government’s uncertain fiscal outlook, and escalating interest rates.
