The government awarded P16.22 billion of re-issued five-year Treasury bonds in Tuesday’s auction at slightly higher rates, the Bureau of Treasury said Tuesday.
Rates of the treasury bonds averaged 3.169 percent, or 8 basis points higher than 3.089 percent in the previous auction.
“We were just following our internal guidelines. Well around this rate, these are the upper end of our internal guideline based on our assessment. [This] is a little over r2 [secondary market],” said National Treasurer Roberto Tan.
Tan said the market was still uncertain on how to react over the impending US Federal rate hike in December.
“The market is still uncertain about the future still and therefore they would like to play on the safe side of the price range,” Tan said.
“There is still uncertainty although there has been [a] change of view by many… on how the Fed will be deciding in the next meeting in December,” he added.
The re-issued treasury bonds has two years and seven months remaining in their life and will mature on May 23, 2018.
Total tender amounted to P36.17 billion, or over P16 billion from the original offer of P25 billion.
The government thought of raising the rates to 3.215 percent and 3.170 percent before settling for an average of 3.190 percent.
Tan, meanwhile, said the government had no immediate plan for an international bond offering.
“We are giving ourselves an opportunistic stand on this there is a good window when there is very good opportunity and we will consider it. Right now there’s no plan. Although we monitor the market closely,” he said.
He said the government was waiting for a less volatile market and reasonable pricing.
Tan also said the government had no decision yet in joining the Asian Infrastructure Investment Bank.
“There’s no decision yet. That is still being discussed by the president and the principals,” he said.
The Bureau of Treasury earlier said it would keep a domestic borrowing cap of P135 billion in the last quarter of the year.
The agency said in a notice posted in its Web site last month it maintained the fourth-quarter local borrowing ceiling through the auction of treasury bills and bonds in October to December 2015 to finance this year’s budget deficit.
The government plans to sell P20 billion worth of 91-, 182-, and 364-day debt papers on Nov. 4 and Dec. 9. It will also sell P25 billion worth of treasury bonds through auctions on Oct. 22, Nov. 20 and Dec. 17.
The auctions of the various debt paper with short and long tenors were the same as programmed in the first three quarters of the year.
The government is keeping a borrowing mix of 14 percent foreign and 86 percent domestic in 2015.
The government plans to borrow about P95 billion from the international market and P605.1 billion from domestic sources.
The government in 2014 borrowed P369 billion—the lowest amount since P275 billion in 2002. The gross borrowings last year were also 33.5 percent lower than P555 billion in 2013.