Gov’t goes big again seeking P3.7bn debt

Under government’s domestic note issuance programme, the BoB floats bonds and Treasury Bills each month to raise debt for government in the capital market. The programme’s ceiling was raised to P55 billion earlier this year after the previous P30 billion cap was reached in February, due to more aggressive borrowing caused by stubborn budget deficits and pandemic spending.

At the auctions, primary dealers, who are exclusively banks, compete to lend to the government by offering the yields or returns they are seeking. The BoB decides the 'stop-out' yield or the maximum 'interest' level it is willing to pay the dealers on the particular securities on offer.