PHL shelves Samurai, Panda bonds for 2020

This boat docked in Barangay Siniguelasan in Bacoor, Cavite, serves the dual purpose of livelihood and study area for some students of Siniguelasan Elementary School on Sunday, as they check their modules as they prepare to go to school the next day. One student said they choose to study outside on a weekend because it saves on electricity, while being light and airy at the same time.

THE Philippine government has already shelved its plans to issue renminbi-denominated Panda bonds and yen-denominated Samurai bonds this year as the Bangko Sentral ng Pilipinas (BSP) recently approved a P540-billion advance credit to help the government cover a budget deficit that swelled on the impact of the Covid-19 pandemic.

National Treasurer Rosalia V. De Leon confirmed this on Monday to reporters, saying there would be “no more” borrowing through Panda and Samurai bonds slated for the year.

However, De Leon said they will still push through with the second Premyo bond sale this year.

Sought to clarify how much was the government eyeing to raise from the issuance of Panda and Samurai bonds this year, De Leon said: “No amount yet for Panda and Samurai.”

To recall, De Leon said in March that the government would not be issuing Panda bonds, particularly for the rest of the first semester of the year, on the back of the Covid-19 outbreak. Back then, she said the government intends to raise $1 billion from the issuance of yen-denominated Samurai bonds on top of the $1-billion to $1.5-billion dollar bond issuance.

In April this year, the government raised $2.35 billion or about P119 billion when it tapped the dollar bond market.

In 2019 the government raised 2.5 billion renminbi or P19 billion from its second Panda bond issuance; and ¥92 billion or P44.3 billion from its Samurai bond sale.

Full award

In a related development, the Treasury also fully awarded P20 billion in Treasury bills in Monday’s auction as rates dropped across all tenors.

De Leon traced the decline in rates to the fact that “monetary stance remains accommodative and inflation outlook continues to be benign.”

The auction was oversubscribed with total bids reaching P79.9 billion, almost four times the offering.

The 91-day T-bills fetched an average rate of 1.088 percent, 2.8 basis points lower than the previous average rate of 1.116 percent. Bids for the tenor reached P20.910 billion, four times the P5-billion offer.

For the 182-day T-bills, the average rate settled at 1.598 percent, dipping by 0.2 basis point from 1.6 percent previously. Tenders for the tenor amounted to P24.286 billion, equivalent to more than quadruple the P5-billion offer.

As for the 364-day debt papers, the tenor’s average rate slid by 0.7 basis point to 1.793 percent from 1.8 percent in the previous auction. The security also attracted total tenders of P34.712 billion, more than thrice the P10-billion offer.

As tax collections are down amid the pandemic, the Cabinet-level Development Budget Coordination Committee (DBCC) projects the country’s budget deficit to expand more than twofold 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—a level that it has not seen in over a decade—from a record low of 39.6 percent of GDP last year.

Image credits: Nonie Reyes


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