Outstanding IOUs rise to P4.19 trillion in H1

The outstanding government-issued IOUs rose to P4.19 trillion at the end of the first half as more securities were issued in June.

The latest Bureau of the Treasury data showed that the combined value of outstanding treasury bills and bonds as of end-June increased from P4.14 trillion in May.

In the first half, treasury bonds accounted for the bulk of the outstanding debt paper, with a face amount totaling P3.87 trillion, up from P3.83 trillion at end-May.

Outstanding treasury bills amounted to P317.8 billion, up from P302.9 billion.

Among the outstanding T-bonds, three-year IOUs amounted to P45 billion; five-year debt paper, P346.4 billion; seven-year treasury bonds, P560.9 billion; and 10-year T-bonds, P384.8 billion.

For 10-year agrarian reform bonds, P6.7 billion have yet to be paid; 20-year IOUs, P319.3 billion; and 25-year debt paper, P235.9 billion.

Of the $6.582-million Philippine Par Bond redenominated into 28.5 years, P97.1 million remained outstanding.

The government also has P983.9 billion worth of outstanding RTBs, P909.3 billion in benchmark bonds; P50 billion in 25-year CB-BoL T-bonds; and P25.2-billion onshore dollar T-bonds.

For the outstanding T-bills, P101 billion is from the auction of 91-day IOUs; P109.1 billion from 182-day debt paper; and P107.7 billion from 364-day treasury bills.

The Treasury will auction off P195 billion in T-bills and T-bonds in the third quarter, up from the P180-billion program for each of the first two quarters.

Finance Secretary Carlos G. Dominguez also earlier said the government was planning to issue “panda” bonds for the first time in the second half.

Panda bonds are yuan-denominated debt paper issued in China by foreign governments or companies.

Dominguez had said the government would offer at least $200 million in panda bonds, with tenors of three and five years.

China’s bond market is the largest among emerging Asian economies.

President Duterte early in his administration announced an economic as well as political pivot to China and neighboring Asian countries.

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

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