Gov’t to borrow P180 B, seeks longer tenor bonds

MANILA, Philippines -  The government is set to borrow P180 billion from the domestic market through the sale of T-bonds and T-bills in the second quarter, the Bureau of the Treasury (BTr) said yesterday.

In a memorandum to government securities eligible dealers, the BTr said it would offer P90 billion each in T-bonds and T-bills from April to June, unchanged from the amount set by the government in the first quarter.

A total of P15 billion in T-bills – divided into P6 billion for 91-day, P5 billion for 182-day and P4 billion for 364-day T-bills – will be auctioned on April 12 and 26, May 10 and 24, and June 7 and 21.

Meanwhile, T-bonds to be offered during the auction period will have longer maturities, with seven-year, 10-year and 20-year tenors, as compared to the three-year and five-year T-bonds offered from January to March.

Seven-year T-bonds will be auctioned on April 20 and June 1, while 10-year securities will be offered on May 4 and June 15. Securities with 20-year maturities will be auctioned on May 18 and June 29.

“During our market consultations, we saw demand for these tenors including for the likes of insurance and pension funds. (We) need to also provide benchmark for these tenors,” National Treasurer Rosalia de Leon told The STAR in a text message.

Sought for comment, Land Bank of the Philippines senior vice president Carel Halog said the addition of longer-term securities may also be a move to manage the maturity of BTr’s liabilities, since a lot of them are already in the short end, especially with the recent issuance of three-year fixed retail treasury bonds (RTB).

“If they (the BTr) are able to raise most of their funding requirements from the RTB, then they would have some leverage in rejecting higher rates in the next auctions. So that should minimize upward pressure on the rates,” he said in a text message.

For 2017, the government is planning to borrow P631.29 billion, lower than last year’s borrowing program by 9.22 percent.