The Bureau of the Treasury plans to issue a total of P99 billion worth of debt paper in the fourth quarter, lower by 15 percent from the previous quarter’s level.
The domestic borrowing plan for the October-December quarter represents an increase of 32 percent from the planned P75 billion in the same period last year.
The year-on-year increase comes as Malacañang recently gave the go-ahead for the Treasury to issue as much as P500 billion worth of retail treasury bonds (RTBs).
In a notice to dealers of government securities, Deputy Treasurer Eduardo S. Mendiola said the Treasury was scheduled to offer in six fortnightly auctions a total of P12 billion in 91-day bills, P18 billion in 182-day bills and P24 billion in 364-day bills.
Also in the fourth quarter, the Treasury is set to offer one batch of seven-year bonds and two batches each of 10-year and 25-year bonds. Each batch of bond issues is worth P9 billion.
Last Monday, National Treasurer Roberto B. Tan said the agency was planning a float of retail debt paper in the fourth quarter although not as much as the maximum amount that Malacañang approved.
RTBs allow a minimum investment of P5,000, which means that individual small investors—as opposed to banks, insurance firms and other usual subscribers of government securities—can buy.
Tan said the Treasury would not use up the maximum in one issuance since the borrowing authority for such volume “is good until it is used up.”
“We will raise only what we need and also what market demand can accommodate,” Tan said.
Finance officials reiterated that the government favored issuing longer-term securities amid efforts to lengthen the average maturity of financial obligations, although the float of shorter term bills would continue.
The government has to keep issuing short-term securities because these serve as basis for lending in the wider market and help in developing the domestic financial sector.
Debt securities lined up in the fourth quarter are expected to help shore up the government’s finances as it expects to incur a budget deficit of P300 billion this year.