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$200 M Panda bonds slated for H2

Finance Secretary Carlos Dominguez III said on the sidelines of the Dutertenomics Forum yesterday the government may issue Panda bonds or yuan-denominated securities in the second half of the year. DOF/Released, File

MANILA, Philippines - Finance Secretary Carlos Dominguez III said the government may issue Panda bonds or yuan-denominated securities in the second half of the year.

“We’ll probably launch it by the third or fourth quarter,” Dominguez said on the sidelines of the Dutertenomics Forum yesterday.

Asked to confirm figures, Dominguez said the issue could amount to around $200 million with maturities of three or five years.

The plan to issue Panda bonds came amid the Philippines’ strengthening ties with China.

Meanwhile, the Bureau of the Treasury (BTr)  yesterday made a partial award of the newly-issued seven-year Treasury bonds (T-bonds) Tuesday despite strong demand from investors.

The government raised less than half of the planned P15 billion offering of bonds due in 2024. The bonds were sold at a coupon rate of 4.5 percent, higher than the average rate of 3.605 percent during the last auction on Oct. 11, 2016.

“(A) 4.5 percent coupon (rate) for fresh seven-year bonds is reasonable,” National Treasurer Rosalia de Leon said, adding the rate is consistent with BTr’s own calibrations.

Only P6.07 billion was raised from yesterday’s auction despite the government receiving total bids of P22.6 billion.

“Strong cash buffer from RTB (retail Treasury bonds) allows us to reject if rates offered are not aligned with BTr estimates,” De Leon said.

To recall, the BTr issued P181 billion in RTBs after a week-long public offering to small investors. The issuance was more than six times the original P30 billion offering, which put the government in a good cash position, De Leon said.

“It would not be really much of a problem on our end to finance even if we are looking at a three percent (fiscal) deficit for the year,” she added.

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