The Bureau of the Treasury (BTr) will raise P120 billion through the sale of T-bills and bonds in December, its last hurrah for the year marked by massive borrowings to finance the fight against COVID-19.
In a Nov. 25 memorandum to all government securities eligible dealers, National Treasurer Rosalia V. de Leon said the Treasury would auction off P20 billion each in short-dated T-bills on Dec. 1, 7 and 14.
Just like in the previous months, the T-bill mix will still be P5 billion each in 91-and 182-day on top of the P10 billion in 364-day notes.
It will also sell P30 billion each of three-and seven-year bonds on Dec. 2 and 15, respectively.
The bond tenors to be sold next month were longer than those offered in prior months, although De Leon said the remaining life of the reissued bonds were shorter or a period of three to four years.
The Treasury will no longer tap the local debt market during the last two weeks of the year amid the Christmas holidays.
Recent auctions held by the BTr saw yields dropping at the short end of the curve alongside the country’s record-low policy rate of 2 percent. The Bangko Sentral ng Pilipinas has so far this year cut key policy rates by a total of 200 basis points amid low and stable inflation as well as slower-than-expected recovery from the pandemic-induced recession.
Longer tenors fetched higher rates lately, which the Asian Development Bank in a report on Wednesday blamed on “expectations that inflation may pick up with the further reopening of the economy and easing of quarantine restrictions that will spur economic activities” as well as “gloomy economic growth forecasts [which] may have also weighed on investor sentiment, leading some to trim their demand for long-term investments to avoid looming risks.”
To boost its COVID-19 war chest, the government had programmed to borrow a record P3 trillion this year, including a gross amount of P2.22 trillion from the auction of treasury bills and bonds.
Domestic debt will account for 74 percent of this year’s borrowings as the financial system remains awash in cash.