The Bureau of the Treasury is mulling over reducing borrowing volumes for the rest of the year as the country remains awash in cash.
“We’re sitting on a mountain of cash,” National Treasurer Rosalia V. de Leon told reporters after Tuesday’s auction of P25 billion worth of six-year bonds.
The Treasury made a partial award worth P18.84 billion at an average annual rate of 3.511 percent, which was up by 51.4 basis points from 2.997 percent at the previous auction. A total of P48.94 billion was tendered.
De Leon noted that there was liquidity in the market, citing “good cash management given the TSA (Treasury single account) and, at the same time, debt management [since] we’re spending less for interest payments.”
As for the borrowing program for the third quarter, De Leon said the Treasury has yet to decide in terms of volumes and tenors.
The official said that they were monitoring the government’s spending figures as well as awaiting the impact on the market of policy decisions that would come out of this weekend’s meeting of the Bangko Sentral ng Pilipinas’ policy-making Monetary Board and the US Federal Reserve.
The Treasury was “not leaning toward reduction of the size [of borrowings], but that’s something we’re looking into,” De Leon said.
“It depends, if there won’t be [an interest] rate increase, maybe we’ll still try to take advantage of the environment. There would be some key decisions to be made, weighing on both the pros and cons of maintaining the same [borrowing] volume or trying to cut it,” she said. Ben O. de Vera