Gov’t to offer P90B in treasury bills, bonds in Q4

The Bureau of the Treasury (BTr) plans to issue in the fourth quarter a total of P90 billion in domestic debt paper, 17 percent lower than the local IOUs lined up in the previous quarter.

Also, the domestic borrowing plan for October to December represents a decrease of 9 percent from the P99 billion programmed in the same period last year.

The BTr, in setting its domestic borrowing program for the fourth quarter, took into consideration the scheduled issuance in October of retail treasury bonds (RTBs).

In a notice to dealers of government securities, National Treasurer Roberto B. Tan said the BTr was scheduled to offer in six fortnightly auctions a total of P6 billion in 91-day T-bills, P15 billion in 182-day bills and P24 billion in 364-day bills.

Also in the fourth quarter, the BTr is set to offer two batches each of five-year and seven-year bonds, and one batch of 10-year bonds. Each batch is worth P9 billion.

Last Tuesday, Deputy Treasurer Eduardo S. Mendiola said the BTr was considering to cut down the number of scheduled bond auctions in the fourth quarter to give way to the planned retail bond issue. Also, there will be no scheduled auctions in the last two weeks of December because of the holiday season.

Mendiola said the latest RTB would carry only one tenor—25 years—and the offer would probably be at least P60 billion. He explained that this volume should be the minimum size for an issue to be “gradeable” and to establish a benchmark.

Further, Mendiola said the BTr—along with the RTB float arrangers—would conduct a tour of various cities across the country to make retail investors aware of the offer.

He said the tour would likely cover the cities of Laoag, San Fernando in Pampanga, Batangas, Tacloban, Roxas, Davao and General Santos.

Last Wednesday, Singapore-based DBS Group said there was a “definite possibility” that the Philippines could get investment grade rating in 2013 for its long-term foreign borrowings following promising results of the government’ debt management efforts.

In particular, DBS noted that the government’s drive to avail itself of more domestic borrowings had helped push down the share of foreign debt in the total outstanding obligations to 35.8 percent as of July from 39 percent in early 2011.

“In terms of its ability to repay debt (both local and foreign), the Philippines is in a much improved position compared to just a few years ago,” DBS said.