The Bureau of Treasury (BTr) will launch in September two new debt instruments — Retail Treasury bonds and Bonds exchange — aimed at attracting the foreign markets for next year’s biggest global bond offering.
Speaking on condition on anonymity because the two new debt instruments are not yet approved by the Development Budget Coordination Committee (DBCC), a very reliable Finance official said introducing new debt instruments are very much needed in order to meet next year’s $3 billion target for global bond offering.
“If you want to impress the bond market, there should be a instrument with various tenors they can choose from. Otherwise,  if nothing new, no reason for them to buy Philippine government securities,” the source told  The Daily Tribune.
The official declined what would be the tenors for the two new debt instruments as these are still being studied by the DBCC.
The inter-agency body is composed of the Department of Finance (DoF), Department of  Budget and Management, National Economic and Development Authority and Bangko Sentral ng Pilipinas.
He said tenors of Retail Treasury bonds and Bonds exchange might be between five to 25 years but “no definite yet except its definite launching on the last quarter of 2012.”
Also being studied carefully are the coupon rates, interest and spreads. Since global market is more buoyant than domestic, these considerations must be carefully studied so that the instruments will yield the right proceeds as targeted by DBCC.
More than 40 percent of government yearly cash disposition are sourced globally and about 60 percent are funded by local sources, Department of Finance Assistant Secretary Ma. Teresa Habitan confirmed recently.
The source said the two new debt instruments should have been launched two years ago but it was withheld as the global market was not so attractive during those period.