NG to borrow P585B from domestic market

THE NATIONAL GOVERNMENT (NG) is looking to borrow P585 billion from the domestic market in the second quarter, the Bureau of the Treasury (BTr) said on Monday.

In a notice on its website, the BTr said it seeks to raise P195 billion from the issuance of Treasury bills (T-bills) and P390 billion from Treasury bonds (T-bonds) in the April-to-June period.

The borrowing plan for the second quarter is 11.42% higher than the revised P525-billion borrowing plan for the first quarter. The BTr had originally planned to offer P585 billion in the first quarter but canceled two T-bond auctions to make way for the retail Treasury bond offer.

As of Monday, the government has raised P482.3 billion in the first quarter, with another T-bond auction scheduled on Tuesday.

Based on its notice, the Treasury will offer more T-bonds with longer tenors in the second quarter.

In April alone, the government is planning to borrow P195 billion, 8.33% higher than the P180-billion borrowing plan for March. This consists of P75 billion in T-bills and P120 billion in T-bonds.

The government will hold five offerings of T-bills to raise P5 billion each, with benchmark tenors of 91, 182, and 364 days. Auctions will be held on April 1, 8, 15, 22 and 29.

Also in April, the BTr is seeking to raise P30 billion each via seven-year T-bonds on April 2, 10-year T-bonds on April 10, 15-year T-bonds on April 16, and 20-year bonds on April 23.

Since April 9 is a holiday (Araw ng Kagitingan), the T-bond auction will be held on April 10 (Wednesday).

For May, the government seeks to raise P210 billion from the domestic market, 7.69% higher than the April program.

The BTr is looking to borrow P60 billion via T-bills in May. It will hold five auctions to raise P5 billion each from 91-day, 182-day, and 364-day T-bills on May 6, 13, 20, and 27.

The Treasury also hopes to raise P150 billion via five T-bond auctions in May.

It plans to borrow P30 billion from seven-year T-bonds on April 30, P30 billion via 10-year T-bonds on May 7, P30 billion via 15-year T-bonds on May 14, P30 billion in 20-year bonds on May 21, and P30 billion in three-year T-bonds on May 28.

In June, the Treasury is planning to raise P180 billion from the domestic market, 9.52% lower than the previous month.

The BTr lined up four T-bill auctions in June. It seeks to borrow P5 billion each from the offer of 91-day, 182-day, and 364-day T-bills on June 3, 10, 17, and 24.

For the long-term borrowings, it hopes to raise P30 billion each from seven-year T-bonds on June 4, 10-year T-bonds on June 11, 15-year T-bonds on June 18, and 20-year bonds on June 25.

“It was noticeable from the second-quarter schedule that the BTr refrained from offering five-year bonds,” a trader said in an e-mail.

Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message the Treasury might be pushing for longer tenors, which is why it avoided offering five-year bonds.

“The markets are anticipating a possible Fed rate cut as early as June 2024 that could be matched locally and could lead to lower Treasury bill and Treasury bond yields by then,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Ricafort said the possible issuance of global bonds as early as the second quarter “could somewhat reduce the need for more local borrowings.”

Finance Secretary Ralph G. Recto last month said the government is looking at borrowing “more or less” $600 million from the offshore bond market.

National Treasurer Sharon P. Almanza said the Treasury is preparing the regulatory requirements for the planned offshore issuance.

“It’s just a matter of execution and when the timing’s right,” she added.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year. — A.M.C.Sy