Outstanding T-bills, bonds hit record P7.38T in May

The government’s reliance on local borrowings further jacked up the amount of outstanding treasury bills and bonds to a new high of P7.38 trillion in May.

The latest Bureau of the Treasury data showed that the outstanding T-bills issued by the national government rose to P1.07 trillion at the end of last month from P1.06 trillion in April. Outstanding T-bonds also increased to P6.31 trillion from P6.21 trillion a month ago.

Since April, the Treasury has been hiking its monthly domestic borrowing program. This month, the Treasury programmed to auction off P215 billion worth of bills and bonds, larger than the P170 billion each in April and May. The Treasury also increased the frequency of its bond auctions to weekly from twice a week in the past. National Treasurer Rosalia de Leon had said this month’s treasury bond auctions catered to investors whose bond holdings matured. As much as P165 billion in government securities—including P131 billion in retail treasury bonds (RTBs)—were redeemed and flowed back into the domestic financial system this month.

As of end-May, the outstanding benchmark 91-day treasury bills amounted to P134 billion; 182-day, P226.4 billion, and 364-day, P709.4 billion. Meanwhile, the outstanding treasury bonds in the same month included P252.5 billion in three-year bonds; P401.8 billion, five-year; P563.1 billion, seven-year and P719.6 billion in 10-year bonds.

The outstanding amount for 10-year agrarian reform bonds was P7.9 billion; P420.3 billion in 20-year; and P235.9 billion in 25-year bonds. As for the $6.582-million Philippine Par Bond redenominated into 28.5 years, the outstanding amount remained P97.1 million.

Also outstanding were P2.59 trillion in RTBs; P1.03 trillion in benchmark bonds; P50 billion in 25-year Central Bank-Board of Liquidators T-bonds; P23.9 billion in onshore dollar T-bond; and P6.6 billion in one-year “Premyo” bonds.

The government had programmed to borrow up to P3.1 trillion this year, of which the bulk of about P2.6 trillion will be sourced from the domestic debt market through the sale of treasury bills and bonds. This is to take advantage of the market’s liquidity and minimize the country’s exposure to foreign exchange risks. Finance Secretary Carlos Dominguez III this week said the Philippines’ debt-to-gross domestic product ratio—a metric that credit-rating agencies watch as this reflected an economy’s capacity to settle obligations—would further rise to 58.7 percent by year-end from 54.6 percent last year and the record-low of 39.6 percent in 2019.

During the first quarter, the debt ratio hit a 16-year high of 60.4 percent, already breaching what debt watchers considered as the manageable public debt threshold of 60 percent, no thanks to the prolonged recession which spilled over to the first quarter of this year.

As of end-April, the national government’s outstanding debt climbed to a new record-high of P10.99 billion. INQ