Outstanding IOUs climbed to P5.9T in H1 as gov’t ramped up local borrowings

MANILA, Philippines — As the government borrowed more locally to finance COVID-19 response while demand for treasury bills and bonds remained robust as investors sought a safe haven amid a pandemic, the amount of outstanding IOUs climbed to a record P5.9 trillion at the end of the first half.

The latest Bureau of the Treasury showed that the outstanding treasury bonds issued by the national government as of end-June reached P5.1 trillion, up from P5 trillion a month ago.

Outstanding treasury bills also continued to rise, amounting to P796.6 billion last month from P720.2 billion in May.

The Philippines planned to jack up borrowings to better respond to the health and socioeconomic crises caused by the COVID-19 pandemic, with domestic sources seen accounting for about three-fourths of the total to temper foreign exchange risks.

It also helped that yields of government securities were declining amid a low-interest-rate environment.

Of the T-bills, P30 billion was from the auction of the come-backing 35-day; P147 billion from the benchmark 91-day; P197.5 billion from 182-day; and P422.1 billion from 364-day.

As for T-bonds, three-year IOUs had a face amount of P153.5 billion; five-year debt paper, P426.5 billion; seven-year treasury bonds, P594.8 billion; and 10-year securities, P533.3 billion.

The outstanding amount for 10-year agrarian reform bonds was P8.5 billion; 20-year IOUs, P420.3 billion; and 25-year debt paper, P235.9 billion.

For the $6.582-million Philippine Par Bond redenominated into 28.5 years, the outstanding amount was P97.1 million.

Also outstanding were P1.7 trillion in retail treasury bonds (RTBs); P939.3-billion benchmark bonds; P50 billion in 25-year CB-BoL T-bonds; P24.9-billion onshore dollar T-bond; and P4.9 billion in “premyo” bonds.