Local gov't borrowings steady at P140 billion in November

MANILA, Philippines — The Duterte administration will borrow P140 billion from local investors in November, similar from this month, the Bureau of the Treasury announced on Wednesday.

In a notice on Wednesday, the agency said P80 billion worth of 91-day, 162-day and 364-day Treasury bills, divided equally, will be offered investors every Monday of November.

On top of these securities, P60 billion worth of 3-year and 5-year Treasury bonds, also equally distributed, will be auctioned off on November 3 and 17.
 
The amount and payment terms of T-bills and T-bonds to be floated next month matches this month’s total offer, which were all fully sold and awarded. Earlier, National Treasurer Rosalia de Leon said shorter-dated debts are offered since investors are generally unwilling to park their funds for longer periods during the health crisis.

As 2020 approaches homestretch, De Leon said government is assessing “market developments” to gauge whether it is a good time to frontload borrowings at the latter part of the year or early 2021.

In the past, frontloading of debt was typical for government looking at locking in favorable interest rates, while keeping the bureaucracy liquid ahead of possible developments that can rattle investors and prompt them to charge higher during the year.

“We are still watching market developments both onshore and offshore,” she said in a text message.

Issuing T-bills and T-bonds is one way government raises funds to bridge its budget deficit capped at a record P1.82 trillion this year, an increased limit supposedly meant to accommodate bigger spending to fund the pandemic response.

With only 3 months left in the year however, barely half of that cap had been exhausted with the budget gap at P879.2 billion as of last month.

As of August, P925.38 billion was raised from weekly T-bill auctions, while another P447.86 billion was collected from longer-termed T-bonds. — Ian Nicolas Cigaral