The Bureau of the Treasury (BTr) plans to borrow P270 billion for the last quarter of the year, lower than the P300 billion programmed for the third quarter. However, this borrowing program is higher than the P200 billion programmed during the last quarter of 2017.
This was revealed by Deputy Treasurer Erwin D. Sta. Ana after the auction committee decided to cap the Treasury-bond (T-bond) rate within the BTr’s internal estimates at 7.085 percent, only increasing by 110.9 basis points, prompting for the partial award of P5.730 billion for the security.
On Tuesday’s auction, the BTr partially awarded the reissued seven-year T-bonds with P5.730 billion from the P15 billion on offer.
Sta. Ana said the last time the BTr awarded this security, at least partially, was on June 13.
“From June 13 to now, there have been several actions or rate hikes from the BSP [Bangko Sentral ng Pilipinas]. So we just took into account those increases; that’s why we came up with a reasonable cut of rate,” he added. “We run internal simulation, and we think that average rate is still acceptable for the Treasury and the auction committee, as well.”
Tuesday’s auction is the last for September. For the October-to-December period, the Treasury is set to have 11 auctions for three-month, six-month and one-year IOUs at an offer size of P15 billion each auction.
According to Sta. Ana, the Treasury will not be holding auctions for government securities in some days of December.
“Basically it’s the same approach as the last quarter, same volume, same frequency,” he said. “Although we recognize there are some weeks in December that we will not be productive in terms of raising via the auctions, hence, the auction calendar for the fourth quarter.”
For T-bonds, a total of six auctions is set with an offer size of P15 billion each auction as well, with the tenors ranging from five years, seven years and 10 years.
For 2019 the government set its total borrowing program at P1.19 trillion, which is higher than the programmed P986 billion set for this year, on the back of the adjusted deficit ceiling of 3.2 percent, according to the BTr.