The Bureau of the Treasury has scaled down its domestic borrowing program for September.
According to an online advisory released on Monday, Aug. 30, the Treasury said it plans to borrow P200 billion from local creditors next month, lower compared with the P215 billion program in August.
The bureau indicated that it will sell P60 billion worth of Treasury bills (T-bills) and P140 billion in Treasury bonds (T-bonds) in September.
The Treasury will still hold a weekly auction for T-bills and T-bonds, offering P5 billion worth of each 91-, 182-day and 364-day long-term IOUs every Monday and issue them on September 7, 14, 21, and 28.
Moreover, the agency will issue P35 billion worth of 3.5-, 10-, seven-, 16-year T-bonds on September 8, 15, 22, and 29, respectively.
The lower domestic borrowing program comes as the Treasury rejected all bids for the three-month, six-month and one-year T-bills as investors sought higher returns for buying those securities.
Had the bureau accepted the tenders, the interest rate on the 91-day debt papers, which banks use in pricing their loans, would have risen to 2.685 percent from 2.070 percent last week.
The government was supposed to sell P5 billion worth of the debt papers. Investors however were willing to buy P6.103 billion.
Offers for 182-day T-bill were rejected, after fetching an average rate of 3.561 percent, up from 3.336 percent seen a week ago.
Total tenders for the six-month securities amounted to P8.252 billion, higher than the programmed P5 billion.
Lastly, the average rate of the 364-dat T-bill would have gone up to 4.399 percent from 3.782 percent during the last successful auction of the one-year IOU.
The bureau had planned to borrow P5 billion. Total tenders reached only P2.934 billion.
Last week, Finance Secretary Benjamin E. Diokno said the government will continue borrowing mostly from the domestic debt markets under the Marcos administration.
For 2022, the government aims to raise P2.2 trillion to enable the economy’s strong and resilient growth, Diokno said.
“The Marcos administration plans to continue this borrowing mix by obtaining 75 percent or around P1.65 trillion from domestic markets to insulate the country from foreign exchange volatilities due to ongoing global uncertainties,” Diokno said.
In the first half of 2022, the government has already raised an estimated P741 billion.