Market jitters brought in by external factors to include the projected rate increase by the US Federal Reserve and exit of the United Kingdom from the European Union did not bring out negative effects to the retail and treasury bond offerings in the Philippines.
The Department of Finance said on Friday the country’s retail and treasury bond offerings were generally successful during the first five months of the administration of President Duterte.
The DOF’s findings were based on the report submitted by National Treasurer Roberto Tan.
Tan also opted not to comment on the impact of Donald Trump’s victory to the country, saying that it would be better to await the policies that the new American leader would announce and implement starting next year.
He added that a Trump presidency and how the Federal Reserve will act on the rate increase would determine market prospects in 2017, although on the part of the Fed, many analysts believe that it “will be very dovish in its statement on what the expectations will be for next year.”
The DOF also noted that Bureau of Treasury (BTr) holds regular bond auctions twice a month for Treasury bills with short-term tenors of 90 days, 180 days and 1 year and another for longer-term Treasury bonds—for a combined total offering of around P45 billion.
BTs, during the period, also issued Retail Treasury Bonds (RTBs) with 10-year tenors two months ago, which raised P100 billion for the government, more than three times the minimum target of P30 billion.
Tan pointed out that the bond offerings have been quite successful and fully subscribed except in the latter part of 2016 as a result of the volatility and uncertainty in the market because of the Federal actions that are being awaited by the public.
“I think once the climate settles down, investors for government securities will return in a very, very strong way,” he said.
Tan added that President Duterte’s non-conventional statements have had no impact on the T-bill and Treasury bond floats because buyers are mostly domestic investors who are aware that such remarks would not affect the country’s macroeconomic fundamentals.
“These are mainly domestic investors, and they look at it as nothing that is affecting the macroeconomic policy of the government,” he stressed.
