Treasury borrowing P360B locally in Q1 of 2019

The government will borrow P360 billion locally through the sale of treasury bills and bonds during the first quarter of next year, a bigger volume than the preceding quarter, in order to finance more programs and projects, especially infrastructure.

In a memorandum to all government securities eligible dealers (GSEDs), National Treasurer Rosalia V. de Leon said the Bureau of the Treasury would offer P120 billion in bills on top of P240 billion in bonds between January and March 2019.

During the fourth quarter of 2018, the Treasury had programmed to sell P270 billion in debt paper, although it opened the tap facility window four times and added one T-bond auction in December amid strong market demand for government securities.

Every Monday for 12 weeks starting Jan. 7, the Treasury plans to issue P20 billion in bills—P6 billion in 91-day, P6 billion in 182-day and P8 billion in 364-day IOUs.

The Treasury will also auction P20 billion each in 10-year bonds on Jan. 8 and March 26; 20-year on Jan. 22; seven-year on Feb. 12; three-year on Feb. 26, and five-year bonds on March 12.

In the fourth quarter, the Treasury sold only P15 billion worth of bills and bonds weekly.

The government had set a slightly wider budget deficit ceiling for 2019, equivalent to 3.2 percent of gross domestic product (GDP), to support its “aggressive spending strategy for both the social and infrastructure sectors,” the interagency Development Budget Coordination Committee (DBCC) earlier said.

As such, the government will ramp up borrowings next year such that the amount would breach the P1-trillion mark for the first time.

De Leon had said that total borrowings for 2019 were expected to reach P1.19 trillion, with the bulk or P891.7 billion to be sourced locally, mainly from the sale of treasury bills and bonds.

Next year, the borrowing mix will be 75-percent local, 25-percent external.

The bias for domestic borrowings would minimize foreign exchange risks, economic managers had explained.