THE BUREAU of the Treasury (BTr) expects market appetite for long-term bonds to pick up this year driven by expectations that inflation will decelerate further.
National Treasurer Rosalia V. De Leon said in a text message that there is an “increasing appetite” for the long-term bonds to be offered this quarter.
“If you notice, bonds offerings are on 10 and 20 years so there is increasing appetite as inflation is expected to decline,” she said in a text message last week.
Inflation is seen to decelerate further as fuel and food costs ease.
A BusinessWorld poll among seven economists yielded a 5.7% median inflation estimate for December, which if realized will be slower than November’s six percent and would mark the second straight drop in prices following September’s nine-year high of 6.7%.
Ms. De Leon added that the BTr has a “strong cash carryover” going into 2019.
For this quarter, the government is planning to borrow P360 billion through a mix of short- and long-term papers, higher than the P270 billion it looked to raise from October to December 2018.
Broken down, the Treasury wants to raise P240 billion through Treasury bills and another P120 billion via Treasury bonds.
The BTr will issue long-term 20-year bonds on Jan. 24 and 10-year instruments on Jan. 10 and March 28.
The government plans to borrow P1.189 trillion in 2019 to fund its spending plan.
Of this amount, 75% will be sourced domestically while the remainder will be from foreign creditors.
Apart from government securities, the government is also considering floating bonds in foreign currencies such as renminbi and yen to maintain its presence in the Chinese and Japanese capital markets.
Specific-use bonds are also being eyed to support the rehabilitation of Marawi City. — Karl Angelo N. Vidal