THE NATIONAL Government (NG) plans to borrow P150 billion from the domestic market in October, the Bureau of the Treasury (BTr) said on Thursday.
The October borrowing plan is 16.67% lower than the P180-billion program for September, but higher than the actual P121.064 billion raised by the government this month.
The government plans to borrow P60 billion from T-bills and P120 billion via T-bonds in September, the BTr said.
Broken down, the government will offer P5 billion each in 91-day, 182-day, and 364-day T-bills on Oct. 2, 9, 16, and 23.
For the long-term tenors, the BTr will offer P30 billion in five-year T-bonds on Oct. 10 and P30 billion in seven-year bonds on Oct. 17.
It will also auction off P30 billion in 10-year T-bonds on Oct. 24.
The lower borrowing plan for October could have been due to the lower amount of government bond maturities during the month versus September and August, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Meanwhile, rates for the T-bills and bonds to be offered next month could be steady due to elevated US Treasury yields recently, he added.
“Excess liquidity in the financial system could still support demand for government securities, but could be offset by [the] lower amount of maturing government bonds in October/4Q 2023,” he said.
The BTr set a lower October borrowing plan likely to give way to its retail dollar bond (RDB) issuance, China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.
The government raised an initial $611.2 million (P34.8 billion) at the rate-setting auction of its second onshore RDBs on Wednesday, more than three times the minimum issue size of $200 million.
The five-and-a-half-year bonds fetched a coupon rate of 5.75%.
The BTr could potentially raise more than $1 billion via the RDBs as investors view it as an alternative to local government securities, Mr. Ricafort said.
Hawkish signals from the Philippine central bank and inflation likely remaining above 5% this month could also contribute to elevated returns for the government securities, Ms. Velasquez added.
BSP Governor Eli M. Remolona, Jr. told Bloomberg on Monday that he is open to an off-cycle rate hike before their Nov. 18 meeting and ruled out cuts in the near term.
The central bank kept its benchmark rate unchanged for a fourth straight meeting at 6.25% last week.
However, officials signaled they might resume tightening at their next meeting if inflation pressures persist.
The NG’s gross domestic borrowing program this year is set at P1.654 trillion, composed of P54.1 billion in T-bills and P1.6 trillion in T-bonds.
The government borrows from local and external sources to help fund a budget deficit capped at 6.1% of the gross domestic product this year. — A.M.C. Sy