Government programs P195-B domestic borrowings in Q3

MANILA, Philippines - The government is set to borrow P195 billion from domestic sources through the issuance of Treasury bills and Treasury bonds in the third quarter, the Bureau of the Treasury (BTr) said yesterday.

In a memorandum addressed to government securities eligible dealers, the BTr said it is planning to sell P105 billion in T-bills and P90 billion in T-bonds in the third quarter.

The BTr has retained its offerings for long-term bonds due to the strong appetite shown by investors for these securities, according to National Treasurer Rosalia de Leon.

“We are building up the volume of those bonds, so basically we will be reissuing along those tenors. (We are building because) of the appetite we are seeing,” De Leon said.

This appetite, according to De Leon, was reflected during yesterday’s auction for reissued 20-year T-bonds, which fetched lower yields amid strong demand from investors.

The reissued T-bonds, with a remaining life span of 19 years and 11 months, fetched an average rate of 5.035 percent, 6.9 basis points lower than the previous yield of 5.104 percent.

The auction was more than twice oversubscribed, with total tenders reaching P31.078 billion as against the P15 billion offering.

"We are all smiles, we had a very good auction," De Leon said.

According to De Leon, the auction yesterday reflected strong demand for long-term securities from institutional investors.

“We see again that appetite on the long tenor bonds are coming back, after the BSP (Bangko Sentral ng Pilipinas) held rates steady, the roll back of oil prices, and again, inflation expectations are low, the treasurer said.