PH ramps up commercial borrowings amid oozing liquidity, low rates

MANILA, Philippines—The Philippines is ramping up commercial borrowings both locally and offshore to take advantage of oozing liquidity and relatively low rates.

The Bureau of the Treasury on Tuesday (April 20) awarded all P35 billion in new seven-year bonds at an auction with coupon rate of 3.625 percent, marginally lower than prevailing yields for comparable debt papers in the secondary market.

Investors tendered P90.4 billion for the IOUs maturing in April 2028, making the auction nearly thrice oversubscribed.

National Treasurer Rosalia de Leon attributed the “healthy” auction to “strong demand.”

De Leon said the Treasury will sell another P25 billion of the new T-bonds through its tap facility window, a bigger volume offered over-the-counter compared to previous taps.

The Treasury was “taking advantage of liquidity, and this is stretching maturing,” De Leon said.

Last Monday, the Treasury also sold an additional P5 billion of 364-day T-bills to 11 government securities eligible dealers (GSEDs)-market makers via tap.

On the planned euro bond sale, ongoing investor briefings were reportedly generating good signs of interest.

Debt watcher S&P Global Ratings assigned an investment-grade ‘BBB+’ rating to the Philippines’ upcoming euro bond issuance.

S&P said the Philippines was eyeing a “benchmark-size” issue or about $500-million worth of bonds.

The Philippines was bullish about tapping the euro debt market due to its stable and historic-low benchmark rates.

Since Philippine government-issued bond spreads remained compressed, officials wanted to stretch the curve.

TSB