THE government is set to borrow more from the local debt market in July, eyeing a figure of P205 billion, higher than the P170 billion it programmed to borrow in June.
National Treasurer Rosalia V. De Leon on Thursday said the borrowing program next month was higher since there are five weeks in July which allowed the Treasury to issue more 91-day, 182-day and 364-day Treasury bills (T-bills) and 35-day T-bills.
“Higher only because there are five weeks plus 15 billion for 35-day [T-bills],” De Leon said in a message to the BusinessMirror.
The Treasury also decided to offer longer tenors of Treasury bonds (T-bonds) next month to provide supply in the market and for “yield pick-up with low rate regime.”
“Also, some investors need long tenors for ALM [asset liability management],” De Leon added.
Broken down, the Treasury is set to issue next month a combined volume of P100 billion in 91-day, 182-day and 364-day T-bills, P45 billion in 35-day T-bills, and P60 billion in T-bonds.
On each of the five weeks of July, the Treasury is set to issue P20 billion in 91-day, 182-day and 364-day T-bills.
Meanwhile, P15 billion in 35-day T-bills will be issued on July 1, 15 and 29.
For the T-bonds, P30 billion in seven-year tenor and another P30 billion in 10-year tenor is scheduled to be issued on July 9 and 23.
The 91-day, 182-day and 364-day T-bills are set to be auctioned off on June 29 and all four Mondays of July.
On June 30, July 14 and July 28, the Treasury scheduled the auction for 35-day T-bills.
The auction for seven-year T-bonds will happen on July 7, while the auction for 10-year T-bonds is scheduled on July 21.
As of end-April, the national government’s outstanding debt ballooned by 10.4 percent to P8.6 trillion from P7.787 trillion in the same period in 2019.
Of the total outstanding debt stock, 67 percent represented domestic debt, while 33 percent was sourced externally.
Domestic debt as of end-April reached P5.864 trillion, a 12.6-percent jump from P5.2 trillion a year ago.
On the other hand, external debt from January to April this year rose by 6 percent to P2.737 trillion from P2.581 trillion in the same period in 2019.
Prior to the onset of the Covid-19 pandemic, the government had set a P1.4-trillion borrowing program for this year.
The national government’s budget deficit as of end-May ballooned to P562.2 billion, nearly 695 times as much as the previous year’s budget gap of only P809 million for the period.
The country’s budget deficit this year is also expected by the government’s economic team to widen to 8.4 percent of GDP or P1.613 trillion due to the drop in revenues and increase in disbursements.
This is significantly wider than the country’s budget deficit of 3.4 percent of GDP or P660.2 billion in 2019.
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