Bureau of the Treasury: Panda bonds issuance likely after Holy Week
MANILA, Philippines — The Philippines’ second issuance of renminbi-denominated debt paper in China will “most likely” be after Holy Week, a ranking Bureau of the Treasury official said Wednesday.
Deputy Treasurer Erwin D. Sta. Ana told reporters after the T-bonds auction that the planned panda bond sale will still be in April, but after the Treasury secured all necessary documentation, including opinion from the Department of Justice (DOJ) and approval from China’s National Association of Financial Market Institutional Investors (Nafmii).
According to its website, Nafmii is “a self-regulatory organization which aims to promote sustainable development of China OTC [over-the-counter] market through innovations, self-discipline and serving market players.”
“We’re still waiting for [DOJ opinion and Nafmii approval] at this stage. But once those are sorted out, we can go ahead… We can just look at the market,” Sta. Ana said.
As such, Sta. Ana said the Treasury was looking at conducting the panda bonds auction in Beijing, China after Holy Week.
“We’re looking at that week [after Holy Week], although nothing’s final,” he said.
National Treasurer Rosalia V. de Leon had said they were eyeing tenors of three and five years to sell a larger volume of up to $500 million in renminbi-denominated securities for the second panda bond issuance.
In March last year, 1.46 billion renminbi ($230 million) in three-year panda bonds were sold by the Philippine government for the first time in China at a yield of 5 percent.
Meanwhile, the Treasury sold all P20 billion in reissued 10-year T-bonds it offered Wednesday at an average rate of 5.954 percent, down from 6.196 percent in March.
Tenders amounted P46.468 billion, making the auction over twice oversubscribed.
To date, the outstanding amount raised by the government from this T-bond series with a remaining life of nine years and nine months stood at P80 billion.
Sta. Ana said the strong demand for treasury bonds showed “market preference on the longer tenors.”
“This is primarily driven by the inflation print—last month’s print and, I think, the view moving forward,” Sta. Ana said.
Inflation slowed to a 15-month low of 3.3 percent in March, such that the government expects the rate of increase in prices of basic commodities to return within its 3-4 percent target range after hitting a 10-year high of 5.2 percent last year. /kga
