NG to borrow ₧215B through local debt market in August

THE national government plans to borrow P215 billion through the local debt market next month, banking on longer tenors to raise the bulk of the amount.

The Bureau of the Treasury wanted to raise P140 billion through Treasury Bonds (T-bonds) and another P75 billion through Treasury Bills (T-bills).

Based on the schedule released by the Treasury, P35 billion in T-bonds will be offered in each auction day for all four Tuesdays of the month. New 3.5-year T-bonds will be offered on August 2 while 7-year debt papers will be sold on August 9. Apart from these, 10-year and 5.5-year T-bonds will be auctioned off on August 16 and August 23, respectively.

On the other hand, P15 billion in 91-day, 182-day and 364-day T-bills will be offered for each of the first four Mondays of the month and on August 30. There will no be auction on August 29 as it falls on a regular holiday (National Heroes Day).

In recent auctions, investors have been seeking for higher yields as Bangko Sentral ng Pilipinas and the US Federal Reserve have been raising rates to ease inflation’s impact on economic recovery.

Locally, Inflation has hit a threeyear-high in June at 6.1 percent, bringing the year-to-date figure at 4.4 percent. This is beyond BSP’S original target band for inflation at 2 to 4 percent.

On Tuesday, investors continued to gobble up longer-term government securities while they sought for higher yields.

National Treasurer Rosalia V. De Leon earlier said longer tenors will still be offered in August given the auction results.

As of end-may, the national government’s outstanding debt dipped to P12.5 trillion from a record high of P12.76 trillion as of end-april due to its repayment of a P300 billion shortterm, zero-interest loan from BSP.

The national government’s debtto-gdp ratio has also risen to a 17-year-high at 63.5 percent, above the internationally recommended 60-percent threshold by multilateral lenders for emerging markets like the Philippines. It is also the highest since the country’s debt-to-gdp ratio hit 65.7 percent in 2005 under the Arroyo administration.