NG to borrow P629B locally in first quarter

THE National Government (NG) is planning to borrow P629 billion from the domestic market in the first quarter of 2025, as it seeks to frontload borrowings ahead of the May elections, the Bureau of the Treasury (BTr) said on Monday.

In a notice on its website, the BTr said it seeks to raise P264 billion from the issuance of Treasury bills (T-bills) and P365 billion via Treasury bonds (T-bonds) in the January-to-March period.

“Higher offering amounts per auction of Treasury bills and Treasury bonds could also frontload/hedge some NG borrowings before the May 2025 midterm elections,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld.

In January, the government plans to borrow P213 billion domestically, consisting of P88 billion in T-bills and P125 billion in T-bonds.

The government will hold four auctions for T-bills in January and will try to raise P7 billion via the 91- and 182-day tenors at each auction. It will also offer P8 billion in 364-day T-bills weekly.

Next month’s T-bill auctions will be held on Jan. 6, 13, 20, and 27.

The Treasury will offer P30 billion in five-year T-bonds on Jan. 7, P30 billion in seven-year T-bonds on Jan. 14, and P30 billion in 10-year T-bonds on Jan. 21.

It also seeks to generate P35 billion from the auction of three-year and 25-year bonds on Jan. 28.

In February, the BTr will try to raise P203 billion — P88 billion via T-bills and P115 billion via T-bonds. It will borrow P7 billion via the 91- and 182-day tenors at each auction, as well as P8 billion via the 364-day T-bills.

T-bill auctions are scheduled on Feb. 3, 10, 17, and 24.

For the long-term debt, the government will offer P30 billion each in five-year T-bonds on Feb. 4, seven-year debt paper on Feb. 11, and 10-year T-bonds on Feb. 18. It seeks to raise P25 billion from 20-year T-bonds on Feb. 25.

For March, the Treasury seeks to borrow P213 billion from the domestic market, comprised of P88 billion from T-bills and P125 billion from T-bonds.

It scheduled four T-bill auctions in March. It will sell P7 billion each in 91-day and 182-day T-bills, and P8 billion in 364-day T-bills at the auctions on March 3, 10, 17 and 24.

The BTr has four T-bond auctions scheduled for March. It will sell P30 billion in five-year debt paper on March 4, P30 billion in seven-year T-bonds on March 11, and P30 billion in 10-year bonds on March 18.

The Treasury seeks to borrow a combined P35 billion via three-year and 25-year bonds on March 25.

“We’re only able to see an expected increase in volume [in the borrowing plan] because there was a reduction in the fourth quarter,” a trader told BusinessWorld in a phone interview, adding the BTr will frontload its requirements this year.

In the fourth quarter of 2024, the government planned to borrow P310 billion from the domestic market, but actually raised P312.6 billion.

The trader also said that offering two T-bond tenors in the same auction is not an “extraordinary” event, noting it was done a few years ago.

For 2025, the NG plans to borrow P2.55 trillion, 0.97% lower than P2.57 trillion this year. Of this, domestic borrowings are set at P2.04 trillion, while external borrowings are pegged at P507.41 billion.

For 2025 to 2027, the NG plans to source at least 80% of its borrowing program from domestic sources, and 20% from foreign lenders.

The NG’s outstanding debt inched up to a fresh high of P16.02 trillion as of end-October amid the peso’s depreciation against the US dollar. Of the total debt stock, 67.98% came from domestic sources. — A.R.A.Inosante