The government eyes to raise P140 billion from domestic sources next month, according to a program released by the Bureau of the Treasury (BTr) on Tuesday.
If followed, the program would be wider than the planned P120 billion this month, but matched the P140 billion programmed a year ago.
Of the amount, the government would borrow P80 billion by issuing Treasury bills (T-bills) and P60 billion by issuing Treasury bonds (T-bonds).
Of the T-bills amount, P20 billion would be generated through the 91-day tenor, P20 billion through the 182-day and P40 billion through the 364-day. Of the T-bond figure, P30 billion would be raised through the five-year tenor and the rest through the seven-year.
“[The] program is based on auction performance during this quarter and market expectations on monetary authorities policy actions going into next year,” National Treasurer Rosalia de Leon told reporters in a message.
Latest data showed that gross domestic financing in the first 10 months settled at P2.64 trillion. Local borrowings were sourced through the issuance of P420.30 billion and P561.90 billion worth of Treasury bills and fixed-rate bonds, respectively.
The government also generated P827.10 billion from the issuance of retail Treasury bonds.
Data from the Department of Budget and Management showed that the government’s gross domestic financing is programmed to reach P2.21 trillion. The Treasury bureau would raise P48 billion by issuing T-bills and P1.67 trillion through the fixed-rate T-bonds.
Finance Secretary Carlos Dominguez 3rd said earlier there was no need for the government to borrow more than it planned this year, as he believes the Philippine economy would bounce back next year with the availability of effective coronavirus vaccines.
“With the development of safe and effective vaccines by next year and their availability, we see no need to get out of the normal loan programs that we have planned,” he said.
Dominguez also said he did not see the need for the central bank to borrow more funds “at this point.”
In March, the government and the Bangko Sentral ng Pilipinas (BSP) signed a repurchase agreement worth P300 billion. The central bank bought P300-billion worth of government securities from the BTr, which was already settled by the government on September 29.
This was followed by another P540 billion in new provisional advances of the government to the central bank for use as budget support amid the coronavirus pandemic.
Dominguez assured the public that reserve amounts in the BSP and other creditors remain available should the government need them in reviving the economy.
Last year, issuances of government securities increased domestic borrowings to P693.8 billion, 16.7-percent higher than P594.47 billion in 2018.
These borrowings brought state financing to about P995 billion in 2019.
The amount, a 10.85-percent jump from P897.55 billion in 2018, was traced to the BTr’s “proactive borrowing strategy that reduced the government’s exposure to foreign exchange risks.”