Outstanding government IOUs down to P3.77 T in Q1

MANILA, Philippines – The value of outstanding government securities slightly declined in April, a sign investors remained optimistic on the economy ahead of the presidential elections.

A total of P3.77 trillion worth of Treasury bonds and bills are currently held by investors, down 2.71 percent from P3.87 trillion in the first three months, data from the Bureau of the Treasury showed.

Broken down, there were P3.49 trillion on T-bonds and P278.55 billion worth of T-bills.

T-bonds and T-bills are investment outlets issued by the government to borrow money from local investors. In return, their holders are paid interest over a particular period.

T-bonds have longer maturities from two to 25 years, while T-bills are due from three months to one year. The government borrows to finance its budget deficit and pay existing debts.

From January to April, the government only added P25 billion worth of seven-year T-bonds. During the time it was auctioned last April 19, analysts pointed out there was a need for investors to reinvest their earnings.

They also said election risk as a result of changing leadership was not present then as the economy remains strong. The paper fetched 3.5 percent interest, similar to when it was last offered.

Meanwhile, lower 10-year T-bonds were also recorded, data showed. It went down 0.61 percent to P362.63 billion, suggesting the government paid papers without replenishing them.

For T-bills, only the 182-day papers posted a increase of 3.92 percent to P89.42 billion.

They were partly offset with a 3.4-percent decrease for one-year securities to P100.13 billion.

Other T-bond and T-bill tenors were steady.