THE Bureau of the Treasury easily raised P30 billion as investors swamped Tuesday’s auction of three-year Treasury Bonds (T-bonds).
The auction was almost four times oversubscribed with total bids for the security reaching P87.963 billion.
With strong demand for the new bond offer, the Treasury also ended up opening the tap facility for an additional P15-billion offer.
The tenor fetched a coupon rate of 2.279 percent.
National Treasurer Rosalia V. de Leon told reporters this is within the secondary pricing since the benchmark rate is 2.35 percent.
De Leon said investors prefer the tenor, which she called a “sweet spot with lower duration risk.”
The Treasury is set to borrow a total of P160 billion from the local debt market this month. This is slightly lower than the P170 billion it programmed in August.
It is also no longer offering 35-day T-bills this month to match investors’ appetite for longer tenors.
The government borrows to finance its spending requirements and to cover its budget deficit.
As tax collections are down amid the pandemic, the Development Budget Coordination Committee (DBCC) is projecting the budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.
The DBCC also expects the country’s debt-to-GDP ratio this year to increase to 53.91 percent of GDP— level that it has not seen in over a decade—from a record-low of 39.6 percent of GDP last year.