The GOVERNMENT is watching of tapping offshore bond marplaced in the second part, Bureau of the Treasury (BTr) said.
“We still have $2.5 billion left in the borrowing program, so we’re looking at disbursing (in) the second or third quarter,” National Treasurer Sharon P. Almanza told reporters on the sidelines of the event Thursday. There is a possibility of a second quarter release. “
In January, the government raised $2.75 billion in a triple-tranche dollar bond issue. Produced $500 million from 5.5-year bonds with a coupon rate of 4.25%; $1.5 billion in 10-year paper at a coupon rate of 5%; and $750 million in 25-year notes with a 5.75% coupon.
Ms. Almanza said US Treasury yields have remained relatively stable relative to local rates, making the situation less volatile.
Meanwhile, BTr is hopeful that the bank’s move to default on March 26 will help calm markets and drive demand for government securities in the coming quarter.
This follows a drop in bids and an increase in yields in March after the start of the US-Israel war on Iran.
The Bangko Sentral ng Pilipinas (BSP) kept its policy rate unchanged at 4.25% during an emergency meeting last week, amid growing concerns over the impact of the Middle East war on the economy.
BSP Governor Eli M. Remolona, Jr. he said they have decided to take a firm stance as their growth outlook remains bleak and as emerging inflation risks appear to be supply-driven, “in which monetary policy is relatively ineffective.”
The BSP now expects headline inflation at 5.1% this year from 3.6% previously. If noticed, the headline print would have breached its 2%-4% target.
Ms. Almanza said the large maturity in April worth P200 billion could add liquidity to the market and drive demand for government securities.
“We have growth in April. So, hopefully those funds will be reinvested,” he said.
The government is looking to borrow up to P784 billion from the domestic debt market in the second quarter or up to P364 billion through Treasury bills and up to P420 billion through Treasury bonds.
Ms. Almanza noted that the second quarter’s lending program includes a mix of short-term and medium-term securities.
“We combine the long and the short. Then we reduce the volume on the long tenders,” he said.
Ms. Almanza also said that foreign participation in the government bond market may increase as soon as the country re-enters JPMorgan Chase & Co.’s Government Bond Index-Emerging Markets (GBI-EM).confirmed in the first week of April.
“They said that the investors are waiting for the actual installation, so, after the announcement, the money will be there [start coming in already],” he said.
In September of last year, the Philippine peso-denominated government bonds (RPGB) were marked as “Index Watch Positive,” which is the final stage of the review of the bonds’ possible inclusion in JPMorgan’s GBI-EM.
JPMorgan’s GBI-EM tracks the performance of sovereign and quasi-sovereign bonds issued by emerging market countries. Country inclusion will require approval by a certain percentage of investors reviewing the index.
Philippine peso notes were withdrawn from GBI-EM in January 2024 due to illegality. Possible inclusions in the index are RPGBs released from 2023 with tenors of up to 20 years. – AMCSy
