Gov’t-issued IOUs hit P3.75T as of end-Oct

The government has issued P3.755 trillion worth of debt paper as of the end of October this year, data from the Bureau of the Treasury (BTr) showed.

In another development, the BTr said it was working on further enhancing the country’s capital markets by establishing a mechanism for “market makers” as well as exempting the repo from documentary stamp tax (DST), National Treasurer Rosalia V. de Leon told reporters.

For the market makers initiative, De Leon said the BTr was working on a framework to identify specific obligations and grant privileges to dealers that would become market movers.

Possible privileges for potential market makers include allowing them to exclusively bid for primary issuances as well as tapping them as underwriters for special issuances, De Leon disclosed.

But De Leon said that putting in place market makers might take some time, as rules had to worked out in collaboration with the Bangko Sentral ng Pilipinas as well as the Securities and Exchange Commission.

In seeking the exemption of the repo from DST, she said, “we have to demonstrate to the BIR [Bureau of Internal Revenue] that the repo structure or format would be true sale—it is not collateral lending.”

These initiatives are aimed at adding more liquidity into the market, De Leon said.

As it is, the country’s cash flow remains in a good condition amid a “very solid and huge” cash buffer, she noted.

Latest data posted on BTr’s website showed that for short-term treasury bills, a total of P271.141 billion was outstanding as of the end of last month.

Of the total outstanding T-bills, P89 billion came from the auction of 91-day bills, the last of which was worth P5 billion issued last Oct. 29 and maturing on Jan. 28 next year. The average rate of the latest three-month paper issued was 1.144 percent.

The outstanding 182-day treasury bills to date, meanwhile, amounted P84 billion. The latest issuance of six-month IOUs worth P6 billion last Oct. 8 maturing on April 8 next year fetched an average rate of 1.676 percent.

As for the 364-day debt papers, the outstanding issuances stood at P98.141 billion as of end-October. The one-year treasury bills worth P6 billion issued last Oct. 8, which will mature on Oct. 7 next year, were auctioned off at an average rate of 1.87 percent.

The bulk or P3.484 trillion worth of the outstanding debt paper issued by the government were long-term treasury bonds.