Gov’t sets P300-B domestic borrowings in Q3

The Bureau of the Treasury (BTr) is set to borrow P300 billion from the domestic market through the issuance of Treasury bills (T-bills) and Treasury bonds (T-bonds) in the third quarter.

In an advisory to government securities eligible dealers (GSED), the Treasury is scheduled to auction off P195 billion in T-bills and P105 billion in T-bonds in the next three months, for a total of P300 billion in onshore securities.

The amount was slightly lower than the P325 billion programmed in the second quarter, but still higher than last year’s P195 billion.

National Treasurer Rosalia de Leon said the agency has decided on a lower borrowing program for the third quarter as the government is currently in a good cash position.

She said the good cash position was brought about by the recent issuance of retail Treasury bonds (RTBs) worth P121.675 billion, as well as the strong performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

“(This is based on) calibrated financing requirements considering RTB and strong collection performance of revenue agencies. The program is also the outcome of consultation with GSED against current market backdrop,” De Leon said.

According to the memo, Tbills will still be auctioned off on a weekly basis in the third quarter, with a total volume of P15 billion each auction. This was lower than the P20 billion offering volume set in the previous quarter.

Broken down, short-term securities will comprise of P4 billion worth of 91-day T-bills, P5 billion in 182-day debt papers, and P6 billion worth of 364-day securities.

The BTr also maintained five tenor buckets – three years, five years, seven years, 10 years and 20 years – for its T-bonds offering.

Bonds of each tenor will have a total volume of P15 billion, lower than the P20 billion volume set in the second quarter.

For the third quarter, bonds will also be auctioned off every other week, a lesser frequency than the weekly auction last quarter.

According to a separate advisory by the BTr, the once-a-week auction schedule for T-bills, as well as the fortnightly schedule for T-bonds will also be followed in the fourth quarter of the year.

However, the BTr has not yet announced the total volume for its fourth quarter borrowing program.

For the whole year, the national government plans to borrow P889.51 billion from local and foreign lenders.