Yield on the re-issued 3-year Treasury bonds ended lower in Tuesday's auction, down 12 basis points from its last auction in January.

Average rate for the 3-year paper was at 5.755 percent, lower than the previous rate of 5.888 percent.

Demand was high for the paper, which was two times over subscribed. Total tender was at P16.35 billion, but only P8.5 billion worth was awarded.

Over the next months, DBS expects yields on Philippine debt would rise, particularly for the longer termed paper.

The Singapore-headquartered bank said 10-year yields should remain under upward pressure due to the risks from the government budget deficit.

The 10-year bond yielded 8.16 percent in the secondary market. - ABS-CBN Business