PH ramps up commercial borrowings

National Treasurer Rosalia de Leon / INQUIRER FILE PHOTO

The Philippines is ramping up its commercial borrowings both locally and offshore to take advantage of the market’s liquidity and the prevailing low rates.

The Bureau of the Treasury on Tuesday awarded all P35 billion worth of new seven-year bonds that it auctioned off at a coupon rate of 3.625 percent, which was marginally below prevailing yields for comparable debt paper 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.”

Tap facility win

De Leon said the Treasury would 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 maturity,” De Leon said.

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

As for the planned euro bond sale, ongoing investor briefings are reportedly generating serious interest.

‘Benchmark-size issue

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.

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, they wanted to stretch the curve. INQ