Treasury: Govt to borrow P190B in April

THE government would borrow more money from local sources next month, according to a program released by the Bureau of Treasury (BTr) on Thursday.

April borrowings were set at P190 billion, up 65.21 percent from P115 billion in the same month a year ago.

Of the amount set, the government would borrow P130 billion through the issuance of Treasury bills (T-bills) and the remaining P60 billion through Treasury bonds (T-bonds).

Of the T-bill amount, P50 billion will be raised through 91-day tenor, P25 billion through 182day, P25 billion through 364-day and P30 billion through 35-day.

Of the T-bond figure, P30 billion will be raised through oneyear tenor and the rest through two-year tenor.

Asked why the BTr would offer a 35-day tenor, National Treasurer Rosalia de Leon said the market continued to have an appetite for short-term tenors.

“The 35-day T-bill provides [an] outlet for investors [and] funds for our short-term requirements,” de Leon explained.

“Given [the] appetite right now for short-term tenors with hold to cash, this will be more attractive to investors at this time,” she said.

De Leon also said the BTr would monitor developments and assess the results of its auctions in April to determine its borrowings program for the second quarter.

Union Bank of the Philippines chief economist Ruben Carlo Asuncion said “it is highly likely that the uptick [in borrowings] is for the government’s response to [ the] Covid- 19 ( coronavirus disease 2019) pandemic and [its] impact on the real economy.”

The “government needs to make sure that enough fiscal measures can support the economy and support growth in the near term,” he added.

Security Bank Corp. Assistant Vice President and economist Robert Dan Roces said auctions were one way to fund Republic Act 11469, or the “Bayanihan to Heal as One Act,” as there are no plans to raise taxes.

The new law allows President Rodrigo Duterte to tap all available state resources to contain the spread of Covid-19 and provide subsidies of between P5,000 and P8,000 to poor and low-income households, depending on the prevailing minimum wage rates in their regions; additional risk allowance for frontline healthcare personnel on top of their hazard pay; and compensation for these workers infected by Covid-19 and the families of those who died in the line of duty.

“Together with lower interest rates, courtesy of the BSP (Bangko Sentral ng Pilipinas), these policies should lead to higher aggregate demand from both private and public sectors, hence ensuring that the economy will be supported for the duration of the enhanced community quarantine and beyond, “Roces said.

Last year, national government financing soared to nearly P1 trillion on the back of higher domestic borrowings.