The Philippines will no longer issue panda and samurai bonds this year as domestic borrowings—amid strong investor demand and low rates—can cover the rest of the financing requirements for 2020, National Treasurer Rosalia de Leon said on Monday.
De Leon noted that the national government already received an advance of P540 billion from its extended repurchase agreement with the Bangko Sentral ng Pilipinas under the Bayanihan to Recover as One Act.
De Leon added that the Bureau of the Treasury would again issue premyo bonds in November to retail investors who wanted both an investment and a chance to win cash and noncash prizes.
To better finance the fight against the health and socioeconomic crises inflicted by the COVID-19 pandemic, the government had programmed to borrow a gross amount of P3 trillion this year, of which domestic sources would account for the bulk or P2.2 trillion to mitigate foreign exchange risks.
As of Oct. 2, the Department of Finance secured a total of $9.91 billion in foreign loans and grants for COVID-19 response, including the $2.35 billion in dollar-denominated global bonds issued in May.
In January, the Philippines also raised 1.2 billion euros in euro-denominated bonds, its opening salvo in the offshore commercial debt market this year.
The Treasury had included yuan-denominated panda and yen-denominated samurai bonds in its external borrowing program for this year, but with the domestic market injected with oozing liquidity, there will be no more offshore bond issuance for the rest of the year, De Leon said.
The updated borrowing program for 2020 was more than double the original P1.4-trillion plan prepandemic.
The national government’s outstanding debt will hit P10.16 trillion by year’s end, jacking up the debt-to-gross domestic product ratio to 53.9 percent from a record-low of 39.6 percent last year.
De Leon attributed the robust subscriptions and lower bid rates for short-dated treasury bills to an accommodative monetary stance amid a benign inflation outlook.
The Treasury awarded P5 billion in the benchmark 91-day IOUs at an average of 1.088 percent, down from 1.116 percent last week.
It sold another P5 billion in the 182-day securities at 1.598 percent, down from 1.6 percent previously.
The P10 billion in 364-day debt paper fetched an annual rate of 1.793 percent, down from 1.8 percent during the previous auction.
Across the three tenors, tenders totaled P79.9 billion, making the auction nearly four times oversubscribed. INQ