MANILA, Philippines - The Aquino Administration successfully raised yesterday P25 billion from its first bond auction this year amid robust investor sentiment.
The bond issue was oversubscribed by more than three times with investors tendering P79.78 billion.
The coupon rate for the seven year bonds was slightly higher at 3.876 percent compared to the previous rate of 3.875 percent.
“We are pleased that in spite of the high liquidity, it was three times oversubscribed. This signifies confidence in the strong fundamentals of the economy,” said National treasurer Rosalia De Leon.
De Leon said the government would sell an additional P5 billion worth of seven-year treasury bonds through a tap facility.
The amount raised would be used for refinancing or operations.
The government relies on local and foreign borrowings to plug its budget deficit, which is expected to hit around P280 billion for 2012.
The country reported a budget deficit of P127.3 billion from January to November 2012, less than half the government’s forecast on the back of higher revenue collections and prudent spending. The amount accounted for 2.6 percent of the country’s GDP.
Government spending has been a key driver of growth this year, fuelling economic activity amid a weakening global economy.