Gov’t shelves plans to sell ‘Panda,’ ‘Samurai’ bonds

Published October 13, 2020, 6:00 AM

by Chino S. Leyco

The Duterte administration has shelved its planned issuances of Panda and Samurai bonds before the end of the year, the Bureau of the Treasury announced.

National Treasurer Rosalia V. De Leon said the government will no longer pursue yen-denominated and renminbi-denominated borrowings due to strong liquidity in the domestic market.

Earlier, the government had planned to sell about $1 billion worth of the yen-denominated Samurai bond, while the renminbi-denominated Panda bond sale was deferred last March due to the COVID-19 pandemic.

Instead of Panda and Samurai bonds, de Leon said the government will again sell the so-called “premyo bonds” to small investors in November.

She said there had been clamor for another round of the prize bonds issuance, which the Treasury intended to roll out in time for the Christmas holidays.

In December 2019, the Treasury had raised P4.96 billion from the first batch of premyo bonds issue.

Yesterday, the government fully awarded bids for short-term IOUs at an auction after yields dropped across the board.

Rate on three-month dept papers dropped to 1.088 percent from last week’s 1.116 percent, while the six-month notes averaged at 1.598 percent, also lower than P1.600 percent in the previous  auction.

The one-year interest rate, on the other hand, dropped to 1.793 percent from 1.800 percent at an auction last October 5.

Aside from lower rates, the Treasury bills auction was also four-times oversubscribed compared with the P20 billion offer, total bids reaching P79.9. billion

De Leon said the government borrowed P20 billion worth of short-dated debts as planned due to strong appetite and lower yields. 

She, however, said the Treasury did not open its tap facility to take advantage of the lower yields.

“The Monetary Policy remains accommodative and inflation outlook continues to be benign,” de Leon told reporters when asked about the reasons for the lower asking price for government borrowings.

Last week, the Bangko Sentral ng Pilipinas (BSP) also approved the disbursement of fresh P540 billion to loan to the national government, an effort to help the Duterte administration found its pandemic response programs.