Gov’t to auction off P135B in IOUs in Q1

The government will borrow domestically —through the auction of treasury bills and bonds— a total of P135 billion in the first quarter of next year, similar to the programmed quarterly volumes this year.

In a Dec. 28 memorandum, National Treasurer Roberto B. Tan said the Bureau of the Treasury would offer P20 billion in T-bills each on Jan. 18, Feb. 22 and Mar. 14, 2016.

The offering for each of the scheduled treasury bill auctions will be composed of P8 billion in benchmark 91-day debt paper, P6 billion in 182-day IOUs, and P6 billion in 364-day T-bills.

As for treasury bonds, P75 billion worth will be offered between January and March.

On Jan. 12, the Treasury will auction off P25 billion worth of 10-year T-bonds; P25 billion in five-year debt paper on Feb. 16, and P25 billion in three-year IOUs on Mar. 29.

Treasury data showed that the value of outstanding debt paper issued by the government slightly slid to P3.895 trillion as of November from P3.898 trillion as of the end of October.

As of end-November, treasury bonds composed the bulk of outstanding IOUs, with a face amount of P3.621 trillion. Outstanding treasury bills, meanwhile, amounted to nearly P274 billion at the end of the first 11 months.

The borrowing program for this year is 75 percent domestic and 25 percent foreign, as “ample domestic liquidity will allow the government to source the majority of its financing needs from the domestic market,” the Cabinet-level, interagency Development Budget Coordination Committee said in its midyear report.

Next year, the government plans to borrow a total of P674.8 billion, lower than this year’s program of P710.8 billion, in a bid to slash the debt stock or the share of outstanding debt to the gross domestic product to a low of 41.8 percent.

In 2016, domestic borrowing will account for 85 percent of the total or P570.2 billion. The government is also scheduled to borrow next year P104.6 billion from foreign sources—P54.1 billion in program loans, P17.1-billion in project loans, and P33.4 billion in  bonds and other inflows.

The Monetary Board has already granted its go-ahead for an up to $2-billion offshore bond sale scheduled for early next year, while the special authority from the Office of the President to do so is still awaiting approval.