Bureau of Treasury to adjust borrowing program in Q3 or Q4

LEGAZPI CITY, Philippines — The Bureau of Treasury (BTr) is set to cancel the auction of Treasury bills (T-bills) and Treasury bonds (T-bonds) as investors continued to gobble up the ongoing sale of five, seven, and 10-year retail Treasury bonds (RTBs).

National Treasurer Roberto Tan told reporters on the sidelines of the launching of the Albay Mayon Credit Surety Fund at the Hotel St. Ellis here that the BTr would adjust its borrowing program in the third or fourth quarter through the cancellation of the auction of some T-bills and T-bonds depending on the amount that would be raised in the ogoing offering. “We will adjust accordingly depending on what we will get,” Tan said.

Due to the strong demand for RTBs, he pointed out that the BTr decided to limit the daily sales volume of RTBs to P10 billion during the offering period that would end on Aug. 17.

“We would like to give everybody a chance to subscribe,” he added.

Tan, who is also undersecretary of the Department of Finance (DOF), said the government intends to limit the value of the sale of RTBs to P100 billion.

He added that state-run enterprises or government-owned or controlled corporations (GOCCs) would be given the chance to invest in RTBs.

Last Aug. 10, the government already sold P25 billion worth of RTBs to set the yield of the five, seven, and 10-year debt papers. Demand for the debt instruments reached P62.957 billion.

The five-year paper fetched a coupon rate of 5.875 percent while the yield of the seven-year paper was pegged at 6.625 percent. The 10-year RTB fetched a coupon rate of 7.250 percent.

Tan said this is an opportunity for Filipinos to invest in government securities even with a small amount of cash. The debt sale would also replenish maturing papers. The government has P36.47 billion worth of three-year RTBs that matured on Aug. 1 and P38.76 billion worth of five-year debt maturing on Sept. 8.

The administration of former President Gloria Macapagal Arroyo sold a record P114-billion RTBs last year with tenors of three and seven years. The RTB sale eclipsed the previous record of P77.7 billion worth of RTBs set in 2007.