Government targets P170 billion from securities offer in June

MANILA, Philippines — The government is targeting to raise P170 billion next month through the issuance of government securities to the domestic debt market, according to the Bureau of the Treasury (BTr).

In an advisory posted on its website, the BTr said the government is planning to offer P110 billion worth of Treasury bills and P60 billion worth of Treasury bonds (T-bonds) to government securities eligible dealers (GSEDs) next month.

This translates to a P170 billion domestic borrowing program for the month of June, the same volume floated by the Treasury this month.

However, Treasury data showed the latest figure is P70 billion higher than the P100 billion in domestic borrowing in the same period last year.

Based on the BTr’s advisory, the Treasury retained the tenors and the corresponding volume for the securities that will be auctioned off next month.

The Treasury said P20 billion worth of T-bills will be offered on June 1, June 8, June 15 and June 22.

Broken down, P5 billion of the total will be in the form of 91-day securities, P5 billion in 182-day debt papers, and P10 billion in 364-day T-bills.

The BTr will also float 35-day T-bills on June 2 and June 17, with a total volume of P15 billion for each auction date.

In addition, P30 billion worth of three-year bonds will be offered on June 9, while another P30 billion worth of five-year debt papers will be auctioned off on June 23.

 “We have extended the curve to three and five years with appetite on this segment for yield pick up. We retained the 35- day (T-bills) to provide an additional liquidity layer and we are just rolling it over,” National Treasurer Rosalia de Leon said.

The government borrows from both domestic and external lenders to plug the expected deficit in its budget.

Latest estimates from the Development Budget Coordination Committee (DBCC) showed that the country’s fiscal deficit may reach P1.56 trillion, this year, which is equivalent to 8.1 percent of gross domestic product.