More long-term debts issued last year – BTr

MANILA, Philippines – The national government issued more longer-termed debts onshore last year, while the amount of obligations maturing a year or less declined, data from the Bureau of the Treasury showed.

The Treasury said government securities floated last year amounted to P3.88 trillion, 1.6 percent up from previous year’s P3.82 trillion.

Broken down, P3.62 trillion on Treasury bonds and P264.44 billion on Treasury bills were issued during the period.

T-bonds and T-bills are investment outlets issued by the government to borrow money from domestic investors. The amount of securities are charged with a specific interest over a particular period of time.

When the government floats any of these, it means the government is borrowing money for its operations from investors, who hope to get it back in the future plus an agreed rate of return.

T-bonds are longer-termed in nature, maturing between two and 25 years and normally charged with higher rates. Payment terms for T-bills, meanwhile, are one year or less with lower interest.

Based on Treasury data, declines in the amount of 91-day and one-year debt papers pulled down the T-bills portfolio.

Specifically, the amount of three-month securities dipped 9.5 percent to P80.528 billion. Their 364-day counterparts, meanwhile, dropped by a faster 11.58 percent to P102.74 billion.

Decreases were partially offset by an increase in 182-day papers, which rose 3.41 percent to P93.07 billion.

As for the T-bonds, the increase was mainly driven by a double-digit rise in benchmark bond issuances, data showed. Benchmark bonds are issued to make a particular security more liquid.

More liquid bonds mean there are more investors holding and trading them in the secondary market. By creating benchmarks, the government aims to lower interest rates charged on these bonds when traded.

Benchmark bonds crossed the P1-billion mark to settle at P1.03 billion by end-December, up 21.33 percent.

The government borrows from the local and foreign markets to finance its budget deficit and pay existing debts.

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