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The government is well-positioned to meet its disbursement goal, according to the DOF chief.

MANILA, Philippines — Despite the rejection of bids for government assets during weekly auctions since last week, the country’s fiscal health remains strong, according to Department of Finance (DOF) Secretary Carlos Dominguez III.

“Following (the) strong RTB (Retail Treasury Bonds) 27 reception, the government is well-positioned to meet disbursement despite BTR rejections during auctions,” he said in a Viber message to journalists on Tuesday.

Based on the medium-term fiscal program set by the inter-agency Development Budget Coordination Committee (DBCC) during its meeting on Dec. 14, 2021, the government’s disbursement program for 2022 amounted to PHP4.955 trillion, or about 23% of domestic output.

Since last week, the auction committee of the Bureau of the Treasury (BTr) has been rejecting bids for Treasury bills (T-bills) and Treasury bonds (T-bonds) because investors demanded high rates.

This, according to National Treasurer Rosalia de Leon, is due to the impact of the Ukraine-Russia conflict uncertainty.

The BTr recently raised PHP457.8 billion in five-year retail treasury bonds (RTB) despite the inability to award a total of PHP70 billion in T-bonds and PHP30 billion in T-bills.

With a minimum investment of PHP5,000, RTBs are aimed at small investors.

The most recent issuance, which was settled on March 4, has a 4.875 percent coupon rate.

Given the volatility created by geopolitical concerns abroad, as well as the expected increases in the Federal Reserve’s key rates, interest rates are on the rise.

“The conflict would heighten the perception of risk in investments,” Dominguez stated on Monday night’s Talk to the People with President Rodrigo Duterte.

He believes the domestic economy will weather the latest crisis, noting that the country will not be directly affected by the Ukraine-Russia conflict and that the economy has previously faced more severe crises, such as the Asian financial crisis and the oil price shock in 2008, but has “managed to get through them.”

“We are convinced that, based on previous experiences, we have the skills and preparation necessary to assist our workers in navigating this situation,” he added.

“We are watching the markets very carefully,” Dominguez said in a Viber message when asked if the government will go forward with its intention to issue its first green bonds despite the current scenario.

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