THE Bureau of the Treasury only partially awarded P19.3 billion out of the P35 billion-offering of reissued 7-year Treasury Bonds (T-bonds).
With a remaining term of six years and nine months, the reissued T-bonds were awarded at an average rate of 4.468 percent, lower than the secondary market rate for the security, based on the PHP Bloomberg Valuation Service (BVAL) reference rate at 4.5454 percent.
Had the Treasury fully awarded the tenor, the average rate would have reached P4.584 percent, which is already beyond the secondary benchmark rate for the security. It also considered accepting P25.8 billion in bids, but the average rate would have ended up higher at 4.524 percent.
Nonetheless, total submitted bids for the security reached P57.2 billion, making the auction oversubscribed.
National Treasurer Rosalia V. De Leon said the average rate of the bids they accepted is still “aligned” with the secondary market rate.
Sought how the government would balance its domestic borrowings next month along with the recent developments of rising bid rates, De Leon said she “will cross the bridge when I am there.”
“We have built sufficient buffers taking advantage when rates were low. Improving collections and additional ODA [Official Development Assistance] inflows will reinforce our cash position,” the Treasurer added.
The Treasury aims to raise this month some P200 billion from the local debt market.
This year, the national government programmed to borrow a total of P3.1-trillion, most of which is expected to be raised through domestic sources.
The government borrows to meet its spending requirements as well as to finance its budget deficit. On Monday, the Treasury revealed that the national government’s budget deficit from January to September widened to P1.14 trillion, surpassing the P879.2-billion shortfall in the same period last year.
Last year, the government’s budget deficit more than doubled to a record-high 7.6 percent of gross domestic product (GDP) or P1.37 trillion, from only P660.2 billion or 3.4 percent of GDP in 2019.
As of end-August this year, the national government’s outstanding debt has hit a new record-high of P11.64 trillion, up by more than a fifth from P9.62 trillion a year ago.