November 24, 2022

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Gov’t to borrow P135B from domestic market in Dec.

THE GOVERNMENT plans to borrow P135 billion from the domestic market in December, the Bureau of the Treasury (BTr) said.

In an advisory posted on Thursday, the BTr said it would borrow P30 billion in Treasury bills (T-bills) and P105 billion in Treasury bonds (T-bonds) next month.

The December borrowing plan is 37.21% lower than the P215-billion program in November.

Broken down, the government will offer P5 billion worth of 91-day, 182-day, 364-day T-bills on Dec. 5 and 12.

For the longer tenors, the government will auction off P35 billion in five-year securities on Nov. 29; P35 billion in 12-year debt papers on Dec. 7; and P35 billion in 20-year instruments on Dec. 13.

A trader said in a text message that the borrowing plan is “not that surprising” as thin liquidity is expected in the last week of December.

“With seasonal illiquidity during the holidays to be expected, the P135-billion December borrowing plan was also in line with our expectations,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.   

For November so far, the government raised only P119.087 billion, along with an additional P5 billion when the Treasury opened its tap facility in a T-bond auction on Nov. 15.

The Treasury will offer P15 billion in T-bills at its last auction for the month on Nov. 28.

Broken down, the government raised P25.85 billion in T-bills versus the P75 billion plan, as majority of the auctions were partially awarded along with one full rejection.

Meanwhile, only P108.114 billion was raised via T-bonds against the initial P140-billion program, as only one out of the four auctions were fully awarded.

“According to our traders, the favorite 12-year and 20-year tenors got the most tenders in auctions so the BTr intuitively tapped that area for the November auctions. This was largely expected,” Mr. Asuncion added.

The gross domestic borrowing program is set at P1.91 trillion this year, composed of P52 billion in T-bills and P1.86 trillion in fixed-rate T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.6% of gross domestic product this year. — Luisa Maria Jacinta C. Jocson