THE Bureau of the Treasury hiked its domestic borrowing program for the month of June to a whopping P215 billion, up by 26 percent from only P170 billion it programmed for May.
The bulk of the programmed domestic borrowings for June, or P140 billion, will now be raised through Treasury Bonds (T-bonds) with longer tenors, double the programmed P70 billion for the same government security this month.
The rest of the amount is planned to be raised by auctioning off P75 billion in Treasury bills (T-bills).
Sought for comment on why it had to ramp up its domestic borrowing program for June, National Treasurer Rosalia V. de Leon said: “Previous auctions saw good reception on long tenors as investors hunt for better yields.”
Unlike the previous setup of holding T-bond auctions fortnightly, the Treasury will also now be selling P35 billion in T-bonds on each of the first four Tuesdays of June.
It will be offering 20-year T-bonds on June 1; 7-year T-bonds on June 8; 10-year T-bonds on June 15; and 5-year T-bonds on June 22.
Apart from this, the Treasury is also set to offer P15 billion in 91-day, 182-day, and 364-day T-bills starting May 31 and on all four Mondays of June.
For this year, the national government has set a P3.03-trillion gross borrowing program, roughly the same amount it borrowed in 2020.
Eighty percent of the amount is programmed to be raised through domestic sources while the remaining 20 percent is expected to come from foreign sources.
The government borrows to finance its spending requirements as well as to cover its budget deficit. Budget deficits occur when expenditures exceed revenues.
THE Cabinet-level Development Budget Coordination Committee (DBCC) last week raised its projection for the country’s budget deficit-to-GDP ratio this year to 9.4 percent or P1.86 trillion from 8.9 percent or P1.78 trillion previously.
Finance Secretary Carlos G. Dominguez III earlier expressed concern on the projected rise in the country’s fiscal deficit, adding that any additional stimulus program has to be revenue-neutral.
Data from the Bureau of the Treasury released on Tuesday showed the government’s cumulative budget deficit as of end-April reached P365.9 billion, inching up by 1.63 percent from last year’s budget gap of P360 billion.
The country’s outstanding debt has also reached a new record-high of P10.77 trillion as of end-March this year, up by 27.1 percent from P8.48 trillion a year ago.
Dominguez had also said they still expect the country’s debt-to-GDP ratio this year to still be below the 60-percent threshold.
The DBCC also recently slashed its growth projection for the Philippine economy this year to 6 to 7 percent from its previous forecast range of 6.5 to 7.5 percent due to the emergence of new Covid-19 variants and the reimposition of stricter lockdown measures in the National Capital Region Plus during the second quarter of this year.
The Philippine Statistics Authority earlier reported that the country’s GDP contracted 4.2 percent in the first quarter of the year, marking the economy’s fifth consecutive quarter of decline.
Socioeconomic Planning Secretary Karl Kendrick T. Chua has said the economy needs to grow an average of 10 percent in the next three quarters to achieve the low-end of the government’s target.
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