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Gov’t starts sale of $1-B global bonds

By: - Reporter / @bendeveraINQ
/ 05:07 AM January 08, 2019

The government will sell up to $1 billion in dollar-denominated bonds starting Monday night (Philippine time) to raise money for its priority programs and projects, including big-ticket infrastructure.

The global bond sale will allow the government to issue between $750 million and $1 billion in IOUs to international investors.

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The Philippine government in recent years sold dollar bonds at the start of the
year, regarded as a good market window.

The proceeds will help fund the budget, with government borrowings earlier programmed to breach the P1-trillion mark this year.

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The borrowing mix for 2019 will be 75-domestic, 25-percent external as the government wanted to minimize foreign exchange risks.

At the first treasury bills auction of the year on Monday, the Bureau of the Treasury only partially awarded the short-dated debt paper, or P16.72 billion out of the P20-billion total offering across three tenors.

The Treasury sold just P2.72 billion in 91-day IOUs, capped at an average rate of 5.411
percent, even as it offered P6 billion.

The rate for the benchmark bills rose from 5.323 percent during its last auction in 2018.

The Treasury, meanwhile, awarded all P6 billion in 182-day as well as P8 billion in 364-day securities.

The six-month and one-year bills were sold at 6.424 percent and 6.641 percent,
respectively, up from 6.344 percent and 6.585 percent previously.

Investors tendered a total of P29.4 billion, making the auction oversubscribed.

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National Treasurer Rosalia V. de Leon described the first auction for 2019 to reporters as “so far, so good,” noting that investors flocked to the IOUs with longer tenors “given expectations that inflation will continue to trend downwards… and it will be coming back to the inflation path by the second half.”

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TAGS: dollar, global bonds, Government
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