BTr eyes new borrowing programs, instruments

The Bureau of the Treasury fully awarded the T-bonds offered Tuesday, with newly reappointed National Treasurer Rosalia V. De Leon baring plans to introduce “innovative” market instruments in the near term, including the repo.

The Treasury sold all P15 billion in reissued three-year IOUs maturing on Jan. 12, 2020 at 3.492 percent, which was “broadly aligned” with secondary market levels although higher than the coupon rate of 3.375 percent. Tenders totaled P33.979 billion or more than double the offering.

“We have a strong and healthy demand from the market. The bid-to-cover ratio was 2.27 times. I think the bids submitted were in line with the secondary market levels for the security,” De Leon said.

In a statement, De Leon said the auction result was a “testament to the resilience of the country’s finances despite global headwinds.”

“Our continued strategic approach in funding the national government’s financing requirements helps maintain fiscal stability and builds upon our proven track record of prudent liability management,” De Leon added.

The government planned to finance its programmed budget deficit of 3 percent of gross domestic product in the next six years through a borrowing mix of 80-percent local and 20-percent foreign.

De Leon said she was planning to introduce innovative programs and instruments that would be aligned with market conditions and would meet the requirements of investors in both the local and external markets.

De Leon said the Treasury was planning to push through with the repo, as well as the New Registry of Scripless Securities (nRoSS). It is also looking into a “synthetic” peso.

A repo, or repurchase agreement, allows a dealer to sell and repurchase short-term government securities to a lender at a specified future date and an agreed price.

Repos are said to provide lenders low risk and are usually used to raise short-term capital.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. earlier said he wanted the repo rolled out before his second term ends in July.

As for the nRoSS, it will likely be launched in the second quarter, De Leon said.

The Treasury earlier said the nRoSS would “integrate auction and registry operations and consolidate key information from these systems [to equip] the Treasury with better tools for data mining and analytics to support policymaking.”

“The nRoSS is also set to minimize operational risks by replacing legacy systems and conform to industry practices and international standards.  Ben de Vera