Government sets P629 billion local borrowing in Q1

MANILA, Philippines — The government plans to borrow P629 billion from the local debt market in the first quarter in the hope of favorable yields, as the Bangko Sentral ng Pilipinas cut policy rates in December.

In a memorandum to all government securities eligible dealers yesterday, the Bureau of the Treasury said it is targeting to raise P264 billion via the auction of 91, 182 and 364-day treasury bills (T-bills) from January to March next year.

The government aims to raise another P365 billion via the sale of Treasury bonds (T-bonds) with maturities of three to 25 years in the first quarter of 2024.

The Treasury holds the auction of short-term T-bills every Monday and long-term T-bonds every Tuesday.

The national government borrows heavily from domestic and foreign creditors to finance the country’s wide budget deficit as it continues to spend more than what it earns.

Sourcing from the domestic market is part of the administration’s prudent debt management strategy and its initiatives to further develop the domestic capital market.

Latest Treasury data showed gross borrowings from January to October reached P2.43 trillion, 22.7 percent higher than the P1.98 trillion in the same period last year.

As of end-October, the government had already used up 94.5 percent of the proposed P2.57-trillion borrowing for the year.

As of end-October, domestic borrowings stood at P1.86 trillion while offshore financing reached P566.25 billion.

Next year, the Philippines will slightly lower its borrowing program by a percentage to P2.55 trillion, still in favor of domestic creditors.

Separate data showed the national government’s total outstanding debt went up by 10.6 percent, to a record high of P16.02 trillion in end-October from P14.48 billion a year ago.

Domestic borrowings accounted for the bulk or 67.98 percent of the debt pile, while the remaining 32.02 percent came from external sources.

Domestic debt rose by 10 percent to P10.89 trillion from P9.9 trillion in the same period a year ago, while foreign obligations increased by 12.1 percent to P5.13 trillion from P4.58 trillion.