BTr sells T-bonds worth P15B

The government on Tuesday borrowed P15 billion in treasury bonds at a lower yield just a week after its successful issuance of $500 million in new global bonds.

The Bureau of the Treasury sold all the new five-year T-bonds it offered at an annual rate of 3.876 percent, below the 4-percent coupon rate, which had been set “in line with market expectations, as benchmark rates track global adjustments,” it said in a statement.

The auction was over twice oversubscribed as it attracted a total of P35.603 billion in tenders.

The IOUs will mature on Jan. 26, 2022.

The government earlier raised to P180 billion the total amount it will borrow domestically in the first quarter through the sale of T-bills and T-bonds, with the Treasury also holding weekly auctions instead of only twice a month.

The total volume of IOUs to be offered during the first three months —P90 billion each in treasury bills and bonds—exceeded the P135-billion worth being offered per quarter in recent years.

As domestic interest rates remain relatively low, the Duterte administration wanted to finance its programmed wider deficit of 3 percent of the gross domestic product in the next six years through a borrowing mix of 80-percent local and 20-percent foreign.

Last week, the Philippine government sold $500 million in 25-year bonds while also successfully switching $1.5 billion in previously issued bonds to fund the higher infrastructure spending requirement of the Duterte administration.

The bonds maturing in 2042 were sold at a coupon of 3.7 percent, similar to the record-low rate last year. The coupon was below the initial pricing guidance of 3.95 percent.

The new money raised from the offshore bond issuance will be used for budgetary support, the Treasury had said.

The government also switched $1.5 billion for bonds maturing between 2019 and 2037, with bids reaching $3.56 billion.

Infrastructure buildup forms part of the Duterte administration’s 10-point socioeconomic agenda aimed at slashing the poverty incidence to 14 percent by 2022 from 21.6 percent last year.

For 2017, the Duterte administration had programmed to spend P850 billion or 5.3 percent of GDP on hard infrastructure, en route to bringing the infrastructure spending-to-GDP ratio to over 7 percent by 2022.