Government sets P170 billion domestic borrowing program

MANILA, Philippines — The government is planning to borrow P170 billion from the domestic market next month through the issuance of government securities, according to the Bureau of the Treasury (BTr).

In an advisory posted on the BTr’s website on Tuesday, National Treasurer Rosalia de Leon said the government is set to offer P110 billion worth of Treasury bills and P60 billion worth of Treasury bonds next month.

This means that P170 billion worth of domestic government securities will be auctioned off this May, P20 billion or 10.53 percent lower than the April borrowing program of P190 billion.

This is, however, P70 billion higher than the P100 billion domestic issuance programmed in the same month last year.

Based on the BTr advisory, P20 billion worth of 91-day, 182-day, and 364-day T-bills will be offered every Monday starting May 4 to May 25.

The volume for three-month securities was reduced to P5 billion, while the offer size for one-year debt papers was doubled to P10 billion. The volume for 182-day T-bills was retained at P5 billion.

In addition, de Leon said the 35-day T-bills would also be floated on May 5 and May 19, with a total volume of P15 billion for each auction date.

Meanwhile, the Treasury will also be offering longer tenors than the one-year and two-year T-bonds it offered in April.

A total of P30 billion worth of three-year T-bonds will be offered on May 12, while another P50 billion worth of five-year debt notes will be auctioned off on May 26.

In a text message to reporters, de Leon said the BTr is now shifting to longer tenors as market appetite for this part of the curve has been revived.

“We are already lengthening tenors as investors feel comfortable with (the) belly of the curve for yield pick up as rates are low,” De Leon said.

The Philippine government borrows from both domestic and external lenders to plug the expected deficit in its budget.

Usually, the Treasury releases its domestic borrowing program on a quarterly basis. But de Leon said earlier the agency did not release the full borrowing program for the second quarter as there is still a need to monitor developments in relation to the coronavirus disease 2019 (COVID-19).