Gov't to borrow P90B in 4th qtr

MANILA, Philippines - The government has programmed to borrow P90 billion from the domestic market in the fourth quarter of the year, the Bureau of the Treasury (BTr) said yesterday.

According to the program, the government will issue P45 billion worth of 91, 182, and 364-day Treasury bills (T-bills) and another P45 billion worth of five, seven and 10-year Treasury bonds (T-bonds).

The P90 billion is lower than the third quarter borrowing program of P108 billion, the second quarter debt plan of P106 billion and first quarter’s P117 billion.

The Treasury retained the issue size for T-bills at P7.5 billion per auction and P9 billion for T-bonds.

According to the program, the T-bill auction dates are Oct. 3, 17, 31; Nov. 14, 28; and Dec. 12 while the T-bond auction dates are Oct. 11 and Nov. 8 for the five-year T-bonds and Oct. 25 and Nov. 22 for seven-year T-bonds. The auction date for 10-year T-bonds is Dec. 6.

Deputy Treasurer Eduardo Mendiola has said the fourth quarter domestic borrowing plan takes into account proceeds from the planned retail treasury bond (RTB) sale in October of at least P60 billion.

The government borrows from the local debt market through the issuance of T-bills and bonds.

This developed as officials said the government is now firming up the details of the planned 25-year RTB sale.

The Treasury is hoping to sell at least P60 billion worth or RTBs but expects to sell more because of robust demand.

The indicative auction date is Oct. 24 after an offer period of Oct. 9 to 22.

RTBs are debt papers issued by the government for as low as P5,000. These instruments are ideal options for retail investors who want to park their funds in government debt papers.

The government relies on local and foreign borrowing to fund its budget deficit, which is expected to hit roughly P279 billion this year or 2.6 percent of gross domestic product (GDP). Last year, the budget gap hit P197.8 billion, lower than the original program of P300 billion set for 2011.