Government to borrow P140 billion in October

MANILA, Philippines — The government is targeting to raise P140 billion in October through the issuance of securities in the domestic market, the Bureau of the Treasury (BTr) said yesterday.

In an advisory posted on the BTr’s website, National Treasurer Rosalia de Leon said the government is set to auction P140 billion worth of debt papers next month, slightly lower than this month’s P160 billion.

Of the total amount, P80 billion will come from the issuance of Treasury bills (T-bills), while the remaining P60 billion will be Treasury bonds (T-bonds).

Based on the schedule posted by the BTr, the government will offer P20 billion worth of short-term government securities in weekly auctions to be held every Monday.

This consists of P5 billion 91-day debt papers, P5 billion 182-day T-bills, and P10 billion 364-day notes.

The BTr is also planning to sell P30 billion worth of three-year securities on Oct. 6, and another P30 billion worth of five-year debt papers on Oct. 20.

De Leon said the agency removed the 10-year tenor from the program and replaced it with the five-year bonds due to market demand.

“The reference is on the short to intermediate part of the curve,” de Leon said.

The government is ramping up its borrowings to plug the deficit in its budget, which is now expected to widen to P1.82 trillion or 9.6 percent of the gross domestic product (GDP) due to weak revenue generation and higher spending requirements amid the pandemic.

For 2020, the Philippines is programmed to borrow P3 trillion, the bulk or P2.22 trillion of which will come from domestic sources. The remaining P785.61 billion will be sourced from external lenders.

In the first eight months of the year, the country already borrowed P2.47 trillion, which is 169.57 percent higher than last year’s P916.27 billion.

This also accounts for more than 82 percent of the country’s borrowing program for the whole of 2020.

Of the total amount, P1.96 trillion came from domestic lenders, a sharp 206 percent increase from P640.73 billion last year.

By the end of the year, the country’s outstanding debt is seen to hit P10.16 trillion, translating to a debt-to-gross domestic product ratio of 53.9 percent.