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Government raises P35 billion from sale of newly issued 5-year bonds

Bureau of the Treasury building in Intramuros, Manila
Bureau of the Treasury building in Intramuros, Manila

THE Bureau of the Treasury raised P35 billion from fully awarding newly issued five-year Treasury Bonds (T-bonds).

The auction was also oversubscribed by more than twice the P35-billion offering as the tenor attracted tenders amounting to P80.78 billion.

The security fetched a coupon rate of 3.375 percent and an average rate of 3.301 percent.

National Treasurer Rosalia V. De Leon said the committee decided to fully award the security on the back of “strong market demand.”

De Leon added it fetched a lower rate than the secondary level for comparable tenor.

For this week, the Treasury has so far raised P60 billion from auctioning off government securities. On Monday, it sold P25 billion in Treasury Bills.

In a bid to take advantage of good liquidity conditions, the government has also programmed to borrow a total of P170 billion in April, higher than the P160-billion it programmed in March.

The national government’s outstanding debt as of end-February this year soared to a new record high of P10.406 trillion as the government continued to borrow more money to respond to the raging Covid-19 pandemic.

Finance officials earlier said they expect the national government’s debt this year to reach 57 percent of gross domestic product (GDP). The government aims to borrow a total of P3.03 trillion this year, roughly the same amount it borrowed in 2020.

As of end-2020, the country’s debt to GDP ratio surged to 54.5 percent—a 14-year-high—coming from a record-low 39.6 percent in the previous year.

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