THE Bureau of the Treasury fully awarded P30 billion in reissued five-year Treasury Bonds (T-bonds) on Tuesday.
The auction attracted total tenders of P68.7 billion, more than 2.3x the P30-billion offer.
With a remaining term of four years and 10 months, the security fetched an average rate of 2.782 percent, lower than the original coupon rate of 3.625 percent set during its first issue in September 2015. This is also below the 3.182 percent average rate upon its latest reissue last June.
National Treasurer Rosalia V. de Leon told reporters the average rate was down on the back of “strong liquidity with heavy bias on belly tenors” and benign inflation outlook.
“Yield at this auction [is] lower by 40 bps [basis points],” De Leon said in a message.
With its decision, the outstanding volume for the series has now reached P203.7 billion.
For this month, the Treasury is set to raise P140 billion by borrowing from the local debt market through the issuance of government securities. This is lower than the P160 billion it programmed in September.
As of end-August, gross borrowings of the national government have already reached P2.47 trillion, equivalent to more than 80 percent of the all-time high P3-trillion borrowing program set by the Development Budget Coordination Committee (DBCC) for this year.
The government borrows to finance its spending requirements as well as to cover its budget deficit.
As tax collections are down amid lockdown measures against the pandemic, the DBCC projects the country’s budget deficit to more than double to 9.6 percent of gross domestic product, 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 it hasn’t seen in over a decade—from a record-low of 39.6 percent of GDP last year.
