Gov’t raises local borrowing goal to B in Q2

The national government raised its domestic borrowing program in the second-quarter of the year to support the Duterte administration’s spending requirements, data from the Bureau of the Treasury showed.

In April to June this year, the government is planning to borrow R325 billion from the local debt market, higher by 35 percent compared with the R240 billion programmed in the first three months of the year.

In the quarter ending June, the treasury bureau set 13 auctions for three-month, six-month and one-year short-dated IOUs, with the offer size cut to R15 billion from R20 billion in the firstquarter.

The government will also offer R10 billion worth of Treasurybonds at each of the 13 auctions for such papers with tenors of three-, five-, seven-, 10- and 20years.

Sought for comment, National Treasurer Rosalia V. De Leon said the government decided to hold twice a week auctions in the second-quarter this year, moving away from its traditional once-a-week offerings done in several years.

De Leon also said that the government lowered the volumes of the offering to avoid under-subscription alongside high throwaway bids during auctions.

“The modification in the issuance program is calibrated based on prevailing market conditions, auction results during the firstquarter, and domestic and external market events,” the treasury bureau said in a statement.

“Furthermore, the BTr [Treasury] crafted the issuance program close coordination with the market to maximize its participation in the fund raising of the national government,” the agency added.

Earlier, the Treasury reported that the national government’s outstanding debt increased in January this year owing to the Duterte administration’s renewed focus on domestic borrowings.

As of January, the total debt of the national government stood at R6.726 trillion, up by 10 percent compared with R6.115 trillion in the same period last year.

De Leon explained that the double-digit increase in debt was attributable to the government’s twin sale of retail bonds last year, which were targeted at small investors.