The Philippine government is working to get the nod of Chinese regulators for its first-ever issuance of so-called “panda” bonds in the second half of the year.
National Treasurer Rosalia V. de Leon said some approvals from Chinese authorities needed to be secured first, after which the Bureau of the Treasury would seek the go-ahead of the Bangko Sentral ng Pilipinas’ policy-making Monetary Board and the Office of the President.
Panda bonds are yuan-denominated debt paper issued in China by foreign governments or companies.
Finance Secretary Carlos Dominguez III told reporters last week that the government was planning to issue at least $200 million in panda bonds during the third or fourth quarter. He said they were looking at tenors of three and five years.
China’s bond market is the biggest across emerging Asian economies.
The Duterte administration earlier announced an economic as well as political pivot to China and neighboring Asian countries.
As domestic interest rates remained relatively low, the Duterte administration wanted to finance its programmed wider budget deficit equivalent to 3 percent of the gross domestic product (GDP) in the next six years through a borrowing mix of 80-percent local and 20-percent foreign.
Yesterday, the Treasury fully awarded P15 billion in new treasury bills it offered at an auction that was more than two times oversubcribed as bids totaled P36.6 billion.
The Treasury accepted P6 billion in 91-day debt paper at 2.299 percent; P5 billion in 182-day IOUs at 2.638 percent, and P4 billion in 364-day bills at 2.989 percent.
“Average rates came in below secondary market levels across all tenors amid healthy market demand,” the Treasury said in a statement.
Deputy National Treasurer Erwin Sta. Ana attributed the successful auction to a liquid market that had appetite for shorter-dated notes. Demand is still there, Sta. Ana said. —BEN O. DE VERA