Gov't sells P9-B 2032 T-bonds

MANILA, Philippines - The government successfully sold yesterday P9 billion worth of 2032 Treasury bonds at a coupon rate of 5.750 on the back of strong demand for investors.

National Treasurer Roberto Tan said there’s a lot of liquidity in the system as P31 billion worth of government debt papers matured on Monday.

The Bureau of the Treasury (BTr) received P29.41 billion worth of bids, more than three times the planned debt sale.

The coupon rate of the 20-year bonds auctioned yesterday fell below the previous average of 6.024 percent rate of a comparable paper floated in June.

Tan attributed the strong demand to positive investor response to the country’s strong economic fundamentals and to the high level of liquidity in the domestic market.

He said investors feel comfortable in parking their funds in government debt papers because of the strong economic fundamentals.

Members of a government economic team led by Tan are set to leave on Sunday for another non-deal road show in the Middle East to showcase the government’s recent gains such as the strong economic growth in the first half of the year and better-than-expected budget deficit numbers as of end-July.

The roadshow, organized by the Investor Relations Office of the Bangko Sentral ng Pilipinas will be held in Riyadh, Dubai, Abu Dhabi, Quatar and Jedah.

Tan said the government has not made any investor presentations yet in the Middle East.

In July, the government posted a budget gap of P39.249 billion, wider than the P26.482 billion posted in the same month last year.

The July figures brought the January to July budget deficit to P73.731 billion, still way below the programmed ceiling for the year of P279 billion or 2.6 percent of gross domestic product (GDP).

The economy, meanwhile, grew by 6.1 percent in the first half of the year after expanding by 5.9 percent in the second quarter and 6.4 percent in the first three months of 2012.

The government hopes to raise P108 billion from the sale of T-bills and T-bonds in the third quarter of the year or slightly higher than the programmed domestic borrowing of P106.5 billion in the second quarter.

The borrows from the local and foreign debt markets to fund its budget deficit, which is expected to hit roughly P279 billion this year. Last year, the budget gap hit P197.8 billion, lower than the original program of P300 billion set for 2011.