Gov’t raises P9B from issuance of 5-year T-bonds

The yield on five-year treasury bonds eased by 6.4 basis points to an average of 4.61 percent, described to be “consistent with secondary market” rates, National Treasurer Roberto B. Tan said.

Even then, Tuesday’s result was 13.5 basis points higher than the 4.475-percent average best bid for the corresponding tenor at the Philippine Dealing and Exchange Corp.

Investors tendered a total of P15.44 billion—less than twice the volume on offer.

The Bureau of the Treasury raised P9 billion as planned from Tuesday’s issue.

Tuesday’s offer was a reissue of seven-year bonds that first came out in March, 2010. This means that the bond has four years and 11 months left until maturity.

Tan said Tuesday’s outcome was consistent with the BTr’s expectations, considering that investors still favored longer-tenors.

The BTr plans to issue P106.5 billion worth of domestic debt notes in the second quarter of 2012—lower by 9 percent from those lined up in the previous quarter.

Similarly, the domestic borrowing plan for the April-June quarter represents a decrease of 9 percent from the P117 billion reported in the same period last year.

The year-on-year decrease in domestic borrowing was brought on by the issuance of $1.5 billion in global bonds last January and of P179.8 billion in retail T-bonds last February.

During this quarter, the BTr is set to offer a batch of five-year bonds, another of seven-year bonds, and two batches each of 10-year and 15-year bonds. Each batch of T-bond issues will be worth P9 billion.

Also lined up are seven fortnightly auctions totaling P14 billion in 91-day Treasury bills, P14 billion in 182-day bills and P24.5 billion in 364-day bills.

BTr data further showed that the government’s debt stock reached P4.951 trillion as of December 2011, up by P18.8 billion or 0.4 percent from the November level due to a net issuance of domestic securities.

When compared to the size of the economy, which was valued at P9.934 trillion last year, the debt stock stood at just 50.9 percent—the lowest ratio in the past 13 years, or since 1998 when it was pegged at 48.1 percent.