National Treasurer Rosalia de Leon
MANILA – The Philippine government will not tap both the Japanese and Chinese debt markets this year as domestic fund raising activities are enough to address requirements.
“No more,” National Treasurer Rosalia de Leon told journalists in a Viber message Monday.
The government originally planned to issue renminbi-denominated Panda bonds last March but this was postponed because of the coronavirus disease 2019 (Covid-19) pandemic and the direction of interest rates.
Its last Panda bond issuance was made in April 2019 when it sold RMB 2.5 billion worth of three-year paper. This is the second for the government following the initial issuance in March 2018.
The last time the government issued yen-denominated Samurai bonds was in February 2019 when it issued 92 billion yen worth of the said debt paper.
De Leon said part of the reason for not pushing through with the issuance of these debt securities are the robust domestic borrowing and the cash advances from the Bangko Sentral ng Pilipinas (BSP).
The Bureau of the Treasury (BTr) has generally made full awards for its Treasury bill (T-bill) and Treasury bond (T-bond) auctions this year due to low interest rates and strong demand for government papers.
The central bank’s policy-making Monetary Board (MB) also has okayed BSP’s lending to the national government of a total of PHP840 billion as budgetary support.
Specifically, the BSP extended PHP300 billion to the national government last March through a repurchase agreement.
The said fund was used to purchase government securities, proceeds of which was used to augment Covid-19 response budget.
BSP Governor Benjamin Diokno said BTr “fully settled the previous PHP300-billion repo (repurchase agreement) on 29 September 2020.”
Last October 1, the MB approved the national government’s request for a PHP540-billion provisional advance which will also be utilized for budgetary support.
The central bank’s Charter authorizes the BSP to extend funding support to the national government in an amount that is equivalent to 20 percent of the latter’s average revenues in the last three years, which to date is about PHP540 billion. (PNA)
