Rate for 2-mo T-bonds down to 2.727%

MANILA, Philippines - The rate for the two-year Treasury bonds (T-bonds) fell yesterday as banks remain upbeat on short-term investments.

The rate for the two-month debt paper averaged at 2.727 percent, down 29.94 basis points from the previous auction.

Rates declined even as bids reached P61.285 billion or more than twice the government’s programmed offering of P25 billion.

The Bureau of Treasury made a full award during yesterday’s auction.

National Treasurer Rosalia De Leon said the government doesn’t see the need to tap the international market for funds given strong liquidity in the domestic banking system and improving collections from both the Bureau of Internal Revenue and Bureau of Customs.

“We don’t really need the funds because of growing collections from both BIR and particularly BOC, which has seen an increase of more than 20 percent for several months now,” De Leon said.

De Leon noted that the implementation of the Treasury Single Account (TSA), a unified structure of government bank accounts, has helped the BTR avoid over borrowing which entails higher interest costs.

The government is expected to save P1.5 billion from the TSA, which is considered an effective tool in establishing oversight and centralized control over government’s cash resources.

A TSA will provide accurate and timely information on bank account balances, revenue and cash positions of the government including its line agencies.  It also facilitates better fiscal, debt management and monetary policy coordination.

It ensures systematic recording and reporting of all liabilities of government entities including real and contingent liabilities to enable the National Government to manage its financial exposure.