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Gov't eyes $2-billion panda, samurai bonds

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MANILA (PhlTodayUSA) â€”National Treasurer Rosalia de Leon is confident that there will be adequate funding for government’s programs this year even if the approval of the proposed 2019 national budget is still pending.

 

This as the Bureau of the Treasury (BTr) has been offering the Treasury bond (T-bond) and Treasury bills (T-bills) through the tap facility and over-the-counter (OTC) due to high demand during the regular auctions.

 

“So we have really built a very strong cash position to be able to meet the requirements for the budget,” she said, noting that “we are, so far, on track on meeting the requirements at least for the domestic borrowings.”

 

De Leon said the government is also on-track with its foreign borrowing program after the issuance of US$1.5 billion US dollar-denominated 10-year global bond last January.

 

She also said that the government has appointed five Japanese banks for the planned issuance of the yen-denominated Samurai bond in the second half of this year, or about 12 months after last year’s issuance.

 

The tenor for this year’s planned Panda bond issuance would be about 3, 5 and 10-year and the amount would likely be about the yen equivalent of US$1 billion to US$1.5 billion.

 

“We still have to see the appetite of Japanese investors,” she said.

 

The issuance of the renminbi-denominated Panda bond is also part of the plan after the country’s initial foray in March last year.

 

“Right now we are nearly finished with all our approvals. We are just watching the market,” she said.

 

For this year’s planned issuance, de Leon said they are considering the issuance of around 300-500 million US dollar equivalent of renminbi.

 

“When we did the first Panda (bond) issue we are just looking at the onshore Chinese investors but they opened up the bond direct facility for Panda (bond) so that also allowed offshore investors to invest in the onshore market,” she said.

 

“We see (that) there would also be a lot of interest for offshore investors to invest in the onshore RMB market,” she added.

 

a De Leon said the government is considering to issue $300 million to $500 million worth of panda bonds by the second quarter, plus another $1 billion to $1.5 billion worth of samurai bonds in the second half of 2019.

 

The volume for the panda bond issuance, she said, is higher than the $230 million issued by the government during its last activity in the Chinese debt market in March last year.

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