Treasury opens tap facility to raise more funds

The Bureau of the Treasury yesterday opened its tap facility window for the fourth straight week to raise additional funds on top of the P15 billion in T-bonds it had auctioned off.

The Treasury sold all of the reissued seven-year IOUs it offered at an average annual rate of 7.09 percent, up from 6.974 percent during the previous auction of the same government securities last month.

Tenders reached P29.9 billion, almost double the offering for the debt paper that has a remaining life of six years and four months.

So far, the outstanding amount for this treasury bond series stood at P71.2 billion.

National Treasurer Rosalia V. de Leon told reporters after the auction investors were “locking in the rates, anticipating that next year, they will eventually go down.”

De Leon noted that domestic inflation was tapering off, while the US Federal Reserve was less hawkish given trade tensions with China and expectations of slower global growth such that the Fed was seen also taking a pause from a rate hike when it meets on Dec. 14.

The tap facility was again opened Tuesday afternoon to the 10 so-called “market makers” among government securities eligible dealers (GSEDs).

During the three previous tap issuances, the Treasury raised a total of P53.1 billion.

Under the recently issued guidelines, the tap facility was no longer capped with the same volume of debt paper offered that day, allowing the Treasury to determine the amount it will issue.

The over-the-counter facility is usually tapped when the Treasury decides to sell more securities to meet excess demand. The facility also allows the government to raise additional funds when money generated from regular auctions falls below targets.