Treasury scales down domestic borrowing in Dec.

Published November 25, 2021, 1:50 PM

by Chino S. Leyco

The Bureau of the Treasury has scaled down its domestic borrowing program for December due to strong demand for the ongoing retail bond offering and fewer working days.

National Treasurer Rosalia V. de Leon said on Thursday, Nov. 25, that the national government plans to borrow only P70 billion from local creditors next month, lower by 65 percent compared with the P200 billion program in November.

“There will be lesser auctions given the Christmas holidays,” de Leon told reporters.

“Moreover, given that we have been seeing strong demand for our ongoing RTB [retail treasury bond] 26 issuance, we have the room to scale down our December auction sizes,” she added.

Based on a November 24 memorandum, the Treasury plans to borrow P70 billion in short- and long-dated debts in December.

During the month, the government will borrow P30 billion through Treasury bills, while it is looking to raise P40 billion via the sale of Treasury bonds (T-bonds).

The Treasury kept its regular three-month, six-month and one-year IOUs at P10 per offer, broken down into P5 billion each for 364-day and P3 billion for 182-day papers as well as P2 billion for the 91-day securities.

Auction for the short-term papers will be held on Dec. 1, 7, and 15.

T-bonds, meanwhile, will be sold at P20 billion per offer. The 10-year papers will be auctioned off on Dec. 9 and on Dec. 16 for the seven-year instruments.

Last Nov. 16, the government launched an offering of five-and-a-half-year RTBs that fetched a coupon rate of 4.625 percent. The offer period runs until Nov. 26, Friday, which will be sold in multiples of P5,000.

Moreover, existing holders of RTBs maturing on Jan. 19 and 26, 2022 can also swap their holdings for the new 2027 retail bonds.

De Leon said proceeds from the new RTBs will be used to support the government budgetary requirement.

The last time the government sold debt to retail investors was last February, during which it borrowed P463.3 billion of the three-year papers, the second-biggest RTB sale on record.

The sale of RTBs form part of the government’s objective of encouraging Filipinos to save by lending their excess money to the government in exchange for a safe return on their investment.

In October, the Treasury bureau had raised $1.59 billion through the sale of maiden onshore retail dollar bonds.

The five-year and 10-year RDBs carried coupons of 1.375 percent and 2.250 percent, respectively. They were offered in minimum investments of $300 and multiples of $100 thereafter.

The Duterte administration’s maiden RDB sale followed the $3 billion global bonds sold in June, $2.5 billion euro-denominated bonds in April, and $500 million yen-denominated “Samurai” bonds in March.