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By Chino S. Leyco, Reporter
THE Department of Finance said any changes to
the government’s borrowing mix would have to wait given the
volatile economic environment. The agency made this announcement
after an auction of one-year Treasury bills saw the yield on the
short-term government debt paper fall despite attempts by banks to
bid up the rate on account of rising inflation.
Finance Undersecretary Roberto Tan said the
70:30 ratio in favor of domestic sources will remain, as future
responses will depend on the opportunities in the last two quarters
of the year.
“Right now, we’re not recommending any
change. If suddenly in the third and fourth quarters you have a very
big opportunity, in terms of advantage, why not?” he said,
referring to another commercial bond float.
“Right now, what we’re trying to pursue is
our official development assistance window,” he said.
The finance official said the inter-agency
Development and Budget Coordinating Committee will take up the
country’s borrowing program in a meeting on Wednesday.
Bangko Sentral ng Pilipinas (BSP) earlier said
it is partial to more borrowings abroad, citing low interest rates
outside the country.
“Things now have changed. The government will
have to compare foreign and local interest rates to see which [is]
more cost-effective. Conditions [can] change our preference for
foreign borrowing, [which] is not set on stone,” BSP Gov. Amando
M. Tetangco Jr. had said.
The government had already borrowed $500 million
through the sale of sovereign bonds, or IOUs, abroad last January.
One-year interest-rate falls
The auction committee on Monday accepted
lenders’ bids for the one-year T-bill at 6.846 percent, lower than
the 9.915 percent sought in a previous bidding. The Bureau of
Treasury failed to complete its P6 billion planned borrowing, as
banks bought only P1.62 billion of the 364-day IOUs.
The government could have secured its
requirements had it accepted the 7.044 percent that banks were
asking for.
“We don’t really need the money anyway. We
just want to pump some supply in the market,” Tan, who also serves
as national treasurer, told reporters after the auction.
He said the government is faced with P4 billion
worth of maturing debt papers this week.
The finance official earlier said the market is
more interested in the BSP’s special deposit accounts (SDA).
Due to a string of failed auctions, the treasury
bureau is set to review the accreditation given to 30 government
securities eligible dealers (GSEDs) after less than 10 of them had
actively participated in past auctions.
Tan said a committee composed of deputy
treasurers will assess the performance of the current GSEDs.
“There is a recommendation to review our
internal accreditation. Many of them really are not participating. I
don’t know if they are serious in participating,” he said,
adding the banks concerned should show they are serious auction
participants.
The government will likewise examine if there is
a need to change the criteria for accreditation, the finance
official said.
Omar Cruz, a former national treasurer, said
investors are concerned about inflation.
Last month, price increases accelerated to a
three-year high of 8.3 percent, breaching the BSP’s forecast.
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