THE BUREAU of the Treasury (BTr) is readying an issuance of offshore bonds but will wait for more favorable market conditions amid elevated US benchmark yields.
National Treasurer Sharon P. Almanza told reporters last week that while an offshore issuance within the first half is “still a possibility,” the government is still deciding on the timing.
“We’re doing all the preparatory work so that we can be ready, market permitting,” Ms. Almanza said. “In the past few weeks, US Treasury yields have been going up. That’s what we’re monitoring. The 30-year US Treasury is at almost 4.9%. It’s close to 5%. So, imagine if we’re the one issuing, it would be almost 6%… That’s too high.”
“We want to borrow at the lowest possible cost.”
On Friday, US Treasury yields turned higher as upbeat economic data and earnings appeared to help investors shrug off any jitters ahead of the US presidential inauguration, Reuters reported.
Yields drifted higher in a choppy session after the upbeat housing and industrial production data supported expectations that the US Federal Reserve would slow the pace of rate cuts.
The yield on benchmark US 10-year notes rose 1.5 basis points (bps) to 4.621% from 4.606% late on Thursday while the 30-year bond yield rose to 4.8535% from 4.845%.
The two-year note yield, which typically moves in step with Fed interest-rate expectations, rose 4.5 bps to 4.283%, from 4.238% late on Thursday.
Meanwhile, Ms. Almanza said the government remains “open” to issuing Japanese yen-denominated bonds this year as part of its offshore borrowing program.
The National Government usually frontloads its borrowings to lock in favorable interest rates.
For this year, gross borrowings are expected to reach P2.545 trillion, based on the 2025 Budget of Expenditures and Sources of Financing.
Out of the total, P507.408 billion will come from external sources, while P2.038 trillion will be sourced from the domestic market.
As for local borrowings, Ms. Almanza said the government is also open to doing a peso-denominated Sukuk bond issue.
Meanwhile, the NG’s plan to offer government securities via electronic wallet platform GCash dubbed as GBonds could be launched by next quarter as details are still being ironed out, she added.
Finance Secretary Ralph G. Recto last year said the government was set to launch GBonds in December, allowing retail investors to buy and sell government securities through the GCash app. — ARAI with Reuters