The government is borrowing less from domestic sources in the third quarter as it remains awash in cash due to underspending on public goods and services at the start of the year.
The Bureau of the Treasury has programmed to sell P230 billion worth of treasury bills and bonds from July to September. This is lower than the P315 billion programmed for the second quarter, which saw oversubscribed auctions as rates declined amid easing inflation.
In a June 21 memorandum to all government securities eligible dealers, National Treasurer Rosalia de Leon said the government would sell P90 billion in treasury bills and P140 billion in treasury bonds between July and September.
The Treasury will offer P15 billion in T-bills—P4 billion in 91-day, P5 billion in 182-day, and P6 billion in 364-day notes—on July 8 and 22, Aug. 5 and 19, and Sept. 2 and 16.
It will also sell P20 billion in T-bonds per auction on the following dates: July 2 (3-year IOUs), July 16 (7-year), July 30 (20-year), Aug. 13 (10-year), Aug. 27 (3-year), Sept. 10 (7-year) and Sept. 24 (20-year).
De Leon earlier told reporters that the third-quarter domestic borrowings would reflect the weaker government spending in the first half of the year as it operated under a reenacted 2018 budget due to the delayed approval of this year’s appropriations.
To recall, President Duterte signed the P3.7-trillion 2019 national budget only on April 15, or over four months late as the two houses of Congress squabbled over pork funds.
Based on Finance Secretary Carlos Dominguez III’s estimates, the government underspent about P1 billion a day from January to April.
The latest Treasury data showed that expenditure as of end-May declined 0.8 percent year-on-year to P1.315 trillion, while disbursements net of interest payments dropped by 1.7 percent to P1.164 billion.
Also, Deputy Treasurer Sharon Almanza noted on Tuesday that the government already raised over half of its financing requirement for 2019, amounting to P1.2 trillion, of which the bulk or P906.2 billion was programmed to be raised locally.
Besides the sale of T-bills and bonds, the government also issued US dollar-denominated global bonds, renminbi-denominated panda bonds, and euro bonds in the first semester.
The issuance of yen-denominated samurai bonds was on track in the third quarter, as the government last week held a nondeal road show in Japan to promote the upcoming sale. —BEN O. DE VERA