Gov’t awards P15B in Treasury bonds

The Bureau of the Treasury sold all of the P15 billion in reissued 10-year Treasury bonds auctioned Tuesday as the yield declined.

In a statement, the Treasury said there was “strong market demand” for the debt paper maturing on May 4, 2027.

The annual rate fell to 4.647 percent, 7.1-basis points lower than the average when the IOU was reissued last month, the Treasury noted.

The yield was also “well within internal estimates,” the Treasury added.

Investors tendered a total of P26.3 billion, making the auction nearly twice oversubscribed.

So far, the total outstanding volume for the said government securities already reached P54.7 billion, according to the Treasury.

Separately, Finance Secretary Carlos G. Dominguez III told a Senate hearing on the proposed 2018 budget of the Department of Finance that the agency would hold a nondeal roadshow in Shanghai, China next week for the planned $200-million issuance of so-called “panda” bonds.

The government plans to issue the panda bonds by October or November.

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

The Monetary Board, the Bangko Sentral ng Pilipinas’ highest policymaking body, already approved in principle the planned issuance of three-year panda bonds, while the Philippine government was in the process of also securing approvals from the People’s Bank of China.

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

To recall, the Duterte administration early on 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 foreign. —BEN O. DE VERA