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Gov’t plans to raise up to P300B in Q3 debt

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THE GOVERNMENT plans to raise up to P300 billion from the sale of Treasury bills and bonds next quarter, according to a June 27 memorandum for securities dealers posted on the bureau’s Web site on Thursday.

The bureau will continue to hold weekly auctions for 91-day, 182-day and 364-day T-bills between July and September, offering up to P15 billion at each auction.

It will also offer P15 billion worth of T-bonds at each of the seven auctions to be held in the same three months with tenors of three, five, seven, 10 and 20 years.

The government is aiming to raise as much as $2 billion via bond issues denominated in yen and US dollars before the year-end, depending on market conditions.

The Philippines, one of Asia’s most active issuers of sovereign debt, is raising money to finance its P8-9-billion “Build, Build, Build” infrastructure plan that aims to upgrade or build roads, bridges, railways, seaports and airports.

National Treasurer Rosalia V. De Leon said in a mobile phone message that the government plans to borrow less next quarter as the Treasury “calibrated financing requirements considering the RTB (retail Treasury bond sale) and strong collection performance of revenue agencies.”

The government raised P121.8 billion from its 21st RTB sale on May 30-June 8. The three-year retail bonds had a 4.875% coupon.

One bond trader said the borrowing schedule is a “welcome development” since the total BTr borrowing in the first half was less than what was programmed.

In the second quarter, out of its P325-billion program, the government borrowed a total of P202.829 billion from the domestic market as it chose to make partial awards due to high rates.

The Treasury borrowed P124 billion out of the planned P240 billion in the first quarter.

“The decision to change the schedule to twice a month instead of weekly issuance is also better for the market,” the trader said.

“The weekly [T-bonds] auction [gave] the market the chance to re-price faster which is not good for the BTr. The bi-monthly auction will let the market digest news and data.”

The government plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit, which is capped at three percent of gross domestic product.

Plans for another dollar bond sale as well as yen-denominated “samurai” debt are currently being finalized. — Karl Angelo N. Vidal and Reuters