Government to borrow P140 billion in November

MANILA, Philippines — The government is eyeing to raise P140 billion next month through the regular issuance of securities in the domestic market, the Bureau of the Treasury (BTr) announced yesterday.

According to the BTr, the government is planning to sell P80 billion worth of Treasury bills (T-bills) and P60 billion worth of Treasury bonds (T-bonds) in November, for a total domestic borrowing of P140 billion.

The total offering remained the same as the volume floated by the Treasury this month, while tenor buckets were also left unchanged.

However, this does not yet include the premyo-bond issuance slated to be launched on Nov. 11. For this issuance, the BTr is targeting to raise at least P3 billion.

According to the BTr, it is scheduled to float P20 billion worth of short-term government securities every week of the month, specifically on Nov. 3, 9, 16 and 23.

Each batch will consist of P5 billion worth of 91-day T-bills, P5 billion in 182-day T-bills, and P10 billion in 364-day notes.

The bureau is also planning to auction P30 billion worth of three-year securities on Nov. 3, and another P30 billion worth of five-year debt papers on Nov. 17.

In a text message to reporters, National Treasurer Rosalia de Leon said the domestic borrowing program for November was designed in view of the market’s preference for the intermediate part of the curve.

“The program is based on auction results, with the intermediate part of the curve as a sweet spot,” she said.

As for the premyo bond offering, de Leon said the government is planning to unveil a new mobile application to make it easier for investors to participate.

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 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.

From January to September, the national government’s gross borrowings already reached P2.56 trillion, accounting for 85 percent of the program.

This was also 180 percent higher compared to the P917.282 billion recorded in the same period a year ago.

Of the total, P2.01 trillion came from domestic lenders, while P550.27 billion was sourced from foreign creditors.

By the end of the year, the Philippines’ outstanding debt is seen to hit P10.16 trillion, before further increasing to P11.98 trillion in 2021.

These would translate to a debt-to-gross domestic product level of 53.9 percent for 2020 and 58.1 percent for 2021.