7-year T-bonds get flurry of bids; ₧35 billion awarded


THE Bureau of the Treasury fully awarded P35 billion in new 7-year Treasury Bonds (T-bonds) on Tuesday. The auction was almost twice oversubscribed as it attracted P63.7 billion in total bids.

National Treasurer Rosalia V. De Leon told reporters the bids for the new T-bonds were aligned with secondary-market levels.

De Leon added that the local debt market priced-in the reports the economy grew 11.8 percent year-on-year in the second quarter, the highest since the fourth quarter of 1988 when gross domestic product (GDP) grew 12 percent. This also marked the end of the country’s economic recession.

The Treasurer said this data “has been absorbed by market.”

The coupon rate for the tenor was set at 3.75 percent. The security is set to mature on August 12, 2028. The Treasury also opened the tap facility for an additional P10 billion offering for the same tenor.

For August, the Treasury has set to borrow P200 billion from the local debt market, slightly lower than the P235 billion it programmed in July.

This year, the national government programmed to borrow a total of P3.1-trillion, of which around 75 percent is expected to be raised through domestic sources.

The outstanding debt of the national government has already piled up to P11.166 trillion as of end-June this year, swelling by 23.3 percent from P9.054 trillion a year ago.

Last week, Finance officials said the debt-to-GDP ratio this year is projected to rise to 59.1 percent from 54.6 percent in 2020. It is also expected to peak next year at 60.8 percent—slightly above the internationally accepted threshold—before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024.

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