PH to borrow P420B T-bills, bonds in Q1 2020

MANILA, Philippines — The Philippines will borrow locally – through the sale of treasury bills and bonds – a total of P420 billion during the first quarter of next year, a bigger volume in line with the government’s program to ramp up borrowings to a record-high for the entire 2020.

In a December 23 memorandum to all government securities eligible dealers (GSEDs), National Treasurer Rosalia V. de Leon said the Bureau of the Treasury will auction off P240 billion in T-bills and P180 billion in T-bonds between January and March next year.

For the treasury bills, a total of P20 billion – P6 billion each in the benchmark 91-day and 182-day, on top of P8 billion in 364-day – will be offered weekly for 12 consecutive Mondays starting January 6 until March 23.

The Treasury will also sell P30 billion each in T-bonds – three-year IOUs on January 7 and March 3; five-year debt paper on February 4; seven-year government securities on January 21 and March 17; as well as 10-year treasury bonds on February 18.

The first-quarter 2020 domestic borrowing program was higher than the P360 billion intended to be issued during in the first quarter of this year and P220 billion during the fourth quarter.

De Leon earlier told the Inquirer that the Cabinet-level Development Budget Coordination Committee (DBCC) this month kept the 2020 borrowings program at a record P1.4 trillion.

As such, the national government’s outstanding debt was expected to reach a record-high P8.8 trillion by the end of next year.

Despite jacking up its borrowings, the government had programmed the debt-to-gross domestic product (GDP) at a steady 41.4 percent by end-2020.

The government had wanted to bring down the share of debt to the economy to 38.6 percent in 2022 by sustaining strong economic growth.

Amid flushing domestic liquidity, the government had preferred to source the bulk of its funding requirements locally in order to minimize foreign exchange risks.

In October, De Leon said 75 percent or P1.05 trillion of next year’s borrowings will be from domestic sources, while the remaining P350 billion will be sourced externally.

The Treasury was also looking into again offering retail treasury bonds (RTBs) and “premyo” bonds to small investors next year, de Leon had said.

According to De Leon, of the 2020 foreign borrowing program, $3.5 billion will be commercial borrowings through debt paper issuance, while about $3 billion will come from program and project loans to be extended by bilateral development partners and multilateral lenders.

Also, the Philippines would likely return to the Chinese, European, Japanese, and US debt markets next year, according to De Leon.

Asked by the Inquirer on Thursday about the timetable for the global issuance of dollar-denominated bonds, which was usually being scheduled at the start of each year, de Leon replied: “We are still assessing funding options,” without elaborating.