Gov’t readies local bond mart plan for Oct as PH debt reaches P11.64T

The Bureau of the Treasury will borrow P200 billion from the domestic debt market in October, which would add to the national government’s debt pile that hit a new high of P11.64 trillion as of August.

In a Sept. 29 memorandum to all government securities eligible dealers, National Treasurer Rosalia de Leon said the Treasury would auction off P60 billion in T-bills and P140 billion in bonds next month.

The Treasury retained its weekly auction volume of P15 billion in short-dated T-bills—P5 billion each in the benchmark 91-, 182- and 364-day securities—for each of the four Mondays of October.

The Treasury will also sell P35 billion each in bonds every Tuesday next month, with tenors of seven-year on Oct. 5 and 26, five-year on Oct. 12 and six-year on Oct. 19.

“The national government borrowing program for 2021 will continue to be primarily sourced from the domestic market. This is to further reduce the country’s exposure to foreign currency volatility and contribute to the development of the domestic capital market,” the Development Budget Coordination Committee said in a report on Thursday.

For 2021, the government plans to source 81 percent of financing from local sources. About P2.49 trillion will be raised from treasury bills and bonds this year out of the total programmed borrowings amounting to a record P3.07 trillion.

Latest data on Thursday showed that the national government’s outstanding obligations in August inched up 0.3 percent from P11.61 trillion last July mainly due to additional domestic borrowings.

Compared to a year ago, the end-August debt stock was 21.1-percent bigger than the P9.62 trillion during the same month last year.

Outstanding domestic debt as of end-August reached P8.22 trillion, accounting for 70.6 percent of the total.

Locally sourced debt rose 1.2 percent month-on-month and jumped 22.5 percent year-on-year.

External debt, on the other hand, declined by 2 percent month-on-month to P3.42 trillion in August, even as foreign obligations climbed 17.9 percent year-on-year.

The Treasury attributed the month-on-month decrease in foreign debt mainly to the P34.2 billion in net repayment of loans extended by development partners.

The peso’s slight appreciation to 49.762 against the US dollar in end-August also helped shed a total of P34.4 billion from the value of the external debt.