THE national government plans to borrow as much as P225 billion next month from the tender of various government securities, according to the Bureau of the Treasury (BTr).
The borrowing plan set by the Treasury for Treasury bills (T-bills) and Treasury bonds (T-bonds) is P75-billion higher than the P150-billion programmed amount for October.
In November, the national government aims to raise P75 billion from five auctions of T-bills with a volume of offering of P15 billion per tender.
The Treasury is also scheduled to hold next month five auctions of T-bonds with varying tenors with a total value of P150 billion. Each T-bonds auction would have a volume of offering of P30 billion.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the higher borrowing plan next month to the national government’s move to “frontload” some of its borrowing requirements ahead of the “seasonal lull” in borrowings during the holiday season.
“Furthermore, the relatively higher interest rates/bond yields since July 2023 would also justify hedging/frontloading some of the national government’s borrowing requirements amid geopolitical risks recently related to the Israel-Hamas war since October 7 that could potentially widen/escalate, though world leaders have been working to prevent this risk from happening,” Ricafort told the BusinessMirror.
The national government has been struggling to borrow its full target amount from the domestic market as investors have been asking for higher than acceptable yields, particularly for T-bills, amid volatile market conditions.
The Treasury was only able to raise P141.641 billion or about 94.42 percent of its target amount from the sale of debt papers this month.
Treasury data showed that it only awarded 86 percent or about P51.641 billion out of its target amount of P60 billion this month.
The Treasury did not record a full award across the four tenders of T-bills this month, settling for either mixed or partial awards.
The highest amount raised by the Treasury in a single T-bills auction was P14.26 billion, recorded last October 23.
The rates for the T-bills were influenced by local and global political and economic factors including the escalating war between Israel and Hamas.
The possibility of a looming local policy interest rate hike and sudden acceleration in domestic inflation print were factored in by investors in their asking yields.
Meanwhile, the Treasury raised the full P90 billion target from three auctions of T-bonds with a value of P30 billion each this month.
For the whole year, the national government plans to borrow P2.207 trillion with a 75:25 mix in favor of domestic sources.