By Chino S. Leyco
The Bureau of the Treasury increased its domestic financing program for the next quarter in line with the Duterte administration’s plan to frontload its borrowings for the year.
Based on the Treasury memorandum dated December 23, the national government has a ₱420-billion borrowing plan in January to March 2020, up by 91 percent compared with ₱220-billion program in the final three months of 2019.
During the quarter, the treasury bureau will sell to ₱240 billion of short-dated notes and ₱180 billion worth of long-term IOUs to all government securities eligible dealers (GSEDs).
Thirteen auctions for three-month, six-month and one-year Treasury bills were set by the national government in the first quarter, with an offer size of ₱20 billion per week between issue dates January 8 and March 25.
The bureau will also offer ₱30 billion worth of Treasury bonds at each of the six auctions for such papers with tenors of three, five, seven, 10 and 20 years from January 9 to March 19 next year’s issue dates.
“The auction date is two days before the issue date. In case auction date falls on a non-working holiday, the auction date will be moved to the next business day, unless announced otherwise,” the treasury’s notice states.
For 2020, the Duterte administration has set a ₱1.4-trillion borrowing plan. Of which, 75 percent will be sourced domestically while the remaining balance of 25 percent will come from the offshore debt markets.
The national government needs to borrow to help bridge its ₱671.2-billion budget deficit ceiling for next year, equivalent to 3.2 percent of the country’s economy, as measured by its gross domestic product (GDP).
Earlier, the Department of Budget and Management (DBM) estimated that the national government’s outstanding debt in 2020 will increase by 11.6 percent to ₱8.77 trillion from a target ₱7.85 trillion by the end of this year.
The bulk of the 2020 outstanding debt will be owed to domestic creditors, equivalent to ₱5.77 trillion, while ₱2.99 trillion will be sourced from overseas.
However, the national government’s debt level as of September 2019 already breached the DBM’s full-year target.
Based on the Treasury data, the national government’s debt obligations from both local and foreign creditors stood at ₱7.907 trillion at end-September this year.