Gov’t sets P200-billion borrowing plan for May

April 28, 2022

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THE NATIONAL Government plans to borrow P200 billion from the domestic market in May, the Bureau of the Treasury (BTr) said on Wednesday.

In an advisory, the BTr said the borrowing plan for next month is the same volume programmed for April. However, the government was only able to raise P160.38 billion last month.

The BTr will hold auctions for Treasury bills (T-bills) every week, which are expected to generate P60 billion.

The auctions for Treasury bonds (T-bonds) are expected to generate P140 billion.

According to the BTr, P5 billion worth of 91-day, 182-day, and 364-day T-bills would be offered every Monday of May (May 2, 9, 16, and 23).

For the long-term tenors, BTr will raise P35 billion in three-year T-bonds on May 3, P35 billion in five-year instruments on May 10, P35 billion in seven-year debt on May 17, and P35 billion in 10-year securities on May 24.

A trader said in Viber message he does not expect the Treasury to scale down its scheduled borrowings in the coming months.

A second trader in an e-mail said borrowings are expected to rise as the Bangko Sentral ng Pilipinas (BSP) is expected to start normalization of monetary policy soon.

BSP Governor Benjamin E. Diokno said on Monday that the central bank might consider a rate hike in June. The Monetary Board is set to meet on May 19.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber government borrowings might increase after the May 9 national elections.

“Government borrowings could again pick up after the elections, consistent with the need to manage the increase in maturing government securities after the elections and also after the end of election campaign period-related restrictions,” he said.

The government borrows from local and external sources to plug a budget deficit capped at 7.7% of gross domestic product this year.

The National Government has a gross domestic borrowing program of P1.91 trillion this year. Of this amount, T-bills will generate P52 billion, while fixed-rate T-bonds will bring in P1.86 trillion. — Tobias Jared Tomas