Treasury sets Nov domestic borrowings at P200B

The Bureau of the Treasury plans to raise P200 billion from the local debt market in November as it kept the weekly T-bills and bonds auction volumes despite rising yields.

In an Oct. 27 memorandum to all government securities eligible dealers, National Treasurer Rosalia de Leon said the Treasury would offer P15 billion in short-dated T-bills on Nov. 2 and the next three Mondays of November.

It will still sell P5 billion each in the benchmark 91-, 182-, and 364-day securities.

The weekly bond offerings on Tuesdays, except in the first week of November which will be held on Nov. 3, retained the P35-billion offer size.

To be auctioned off are five-year IOUs on Nov. 3 and 9; seven-year on Nov. 23 and five-year on Nov. 16.

Last Tuesday, the Treasury awarded only P19.3 billion out of the P35 billion in reissued seven-year bonds it offered due to rising bid rates.

De Leon said the partial award at an average rate of 4.468 percent was aligned with secondary market yields.

Bids reached a high of 4.58 percent and a low of 4.2 percent for the bonds maturing in six years and nine months’ time.

Given the government’s bigger reliance on domestic borrowings through the weekly treasury bill and bond auctions, the financing program for November took into consideration the recent higher yields sought by investors due to market jitters caused by elevated headline inflation and the looming US Federal Reserve tapering.

“We have built sufficient buffers when rates were low,” De Leon said.

“Improving [revenue] collections and additional ODA (official development assistance) inflows will reinforce our cash position,” she added.

The government had programmed to raise 81 percent of this year’s financing need from local sources. Some P2.49 trillion will be raised from T-bills and bonds this year out of the total planned borrowings of P3.07 trillion.