Government to borrow P140 billion in October

PAUL YEUNG/BLOOMBERG

THE government plans to borrow P140 billion from the domestic market in October, less than the P160-billion program this month, as investors remain highly liquid but more cautious.

In an advisory posted last Thursday, the Bureau of the Treasury (BTr) said it will borrow P80 billion in Treasury bills (T-bills) and P60 billion in Treasury bonds (T-bonds) next month.

Auctions for T-bills will be held weekly, while T-bonds will be offered fortnightly.

The BTr will auction off P5 billion worth of 91- and 182-day debt papers each, and P10 billion worth of 364-day securities every Monday.

The Treasury is also planning to raise P30 billion from the issuance of three-year T-bonds on Oct. 8, and another P30 billion from 10-year notes on Oct. 22.

National Treasurer Rosalia V. de Leon earlier said there is high liquidity among investors as bids for government securities continued to increase.

She said a stronger appetite will remain for the short-term and medium-term tenors amid expectations of steady rates from the central bank.

“[Market] preference is on the short to immediate part of the curve,” Ms. De Leon said via Viber on Tuesday.

The Bangko Sentral ng Pilipinas (BSP) has cut rates by 175 basis points so far this year, bringing the rates on its overnight reverse repurchase, lending, and deposit facilities to record lows of 2.25%, 2.75% and 1.75%, respectively.

The central bank is widely expected to keep rates on hold at its policy meeting on Thursday.

Bond traders said investors are more cautious with long-term investments as the Philippine economy has yet to improve amid the rising number of coronavirus disease 2019 (COVID-19) cases.

“Good volume participation was noted as investors continue to pick bonds at the short-end of the curve to put their excess cash into work while waiting for fresh developments surrounding the COVID-19 global pandemic,” the trader said via Viber. — KKTJ