Gov’t eyes sale of $1B bonds in local market
Ballet Philippines’ ‘Blue Moon Series,’ Tanghalang Pilipino’s ‘Pahimakas sa Isang Ahente’ lead Philstage Gawad Buhay!’s 2014 3rd-quarter citations
Encouraged by the success of an initial offering of dollar-denominated bonds in the local market last November, the government is planning to issue another batch within the first quarter.
This was disclosed by Roberto Juanchito Dispo, president of First Metro Investments Corp., who said that making the sale of dollar-denominated bonds in the domestic market a regular activity was prudent given the growing foreign exchange liquidity in the local banking sector.
Dispo said FMIC, which has been tapped several times in the past by the government to help facilitate the dollar issuances, was recommending the sale of as much as $1 billion worth of dollar-denominated bonds locally.
“The market can absorb $1 billion considering the liquidity of banks,” Dispo told reporters Monday at the sidelines of the FMIC briefing on its 2013 economic outlook.
He said foreign currency deposit units (FCDUs) of banks in the country were estimated to be managing about $27 billion in dollar savings from the public.
“[Bureau of the] Treasury wants FMIC to do something for them in the first quarter to take advantage of the success of the first one. Banks are liquid and so they are looking for [investment] outlets,” Dispo added.
In November, the government sold all the $500 million in dollar-denominated bonds in the domestic capital market. The securities offering was swamped by investors with bids totaling $1.74 billion. The government accepted only $500 million as it deemed it wise to stick to the borrowing program.
The dollar-denominated bonds, which will mature in 2023, fetched a rate of 2.75 percent. Treasury officials said the rate reflected the warm acceptance by the market, noting that bonds issued by other countries with similar maturities carried higher rates.
Proceeds of the bond sale were intended to pay the dollar-denominated debts of the government, among other expenditure needs requiring foreign currencies.
The issuance of dollar-denominated bonds in the local capital market was supported by the Bangko Sentral ng Pilipinas, which said such an activity helped address the sharp appreciation of the peso against the greenback.
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94