BTr opens OTC window for GOCCs

MANILA, Philippines — The Bureau of the Treasury (BTr) has established an over-the-counter (OTC) window for government-owned and -controlled corporations (GOCCs), tax-exempt institutions (TEIs) and local government units (LGUs) to have more access to government securities.

In a memorandum, the BTr said GOCCs, TEIs and LGUs would now be allowed to invest in government securities through an OTC window, pursuant to Department of Finance (DOF) Order 071-2018.

This window will allow the sale or offering of government securities to eligible institutions other than through the BTr’s regular auction.

“Department of Finance Order (DO) 071-2018, further amending DO 141-95, provides for an additional Window for the sale of government securities through the OTC Window,” National Treasurer Rosalia De Leon said.

“The DOF order states that GOCCs, TEIs, and LGUs are allowed to access this window in the manner prescribed by the Bureau of the Treasury (BTr),” she added.

Under the new memo, the BTr will announce the opening of the OTC window after a scheduled Treasury Bill (T-bill) auction.

“Only tax-exempt GOCCs are allowed access to the OTC window,” the bureau added.

The applicable yield rate under the OTC window will also be decided by the Treasury.

Eligible investors may place a minimum amount of P10 million and any excess thereof should be in multiples of P1 million.

Placements in the OTC window should be made through government financial institutions – such as the Land Bank of the Philippines and the Development Bank of the Philippines – and entered in the National Registry of Scripless Securities.

“The BTr reserves the right to accept, reject, partially or in full, placements submitted. The BTr shall announce the results on or before 5 pm on the same day,” the Treasury said.

Terms of the OTC issuance, including settlement and issue date, will be similar to the auctioned securities.

GOCCs and LGUs are allowed to place idle funds – in excess of normal operating requirements – in government securities in coordination with the BTr.

In the first nine months of the year, the national government’s gross borrowings have reached P683.28 billion, 9.5 percent higher than the P623.78 billion recorded the same period last year. Of this amount, P399 billion was sourced from domestic lenders.

About P154.42 billion of the total domestic debt came in the form of Treasury bonds while P124.82 billion was raised through Treasury bills.