Gov’t to borrow up to P784B via local market in Q2

By Aaron Michael C. Sy, Reporter

THE GOVERNMENT is looking to borrow up to P784 billion from the domestic debt market in the second quarter, the Bureau of the Treasury said on Wednesday.

According to the borrowing schedule posted on its website, the BTr is looking to raise up to P364 billion via Treasury bills (T-bills) and up to P420 billion through Treasury bonds (T-bonds) in the April-to-June period.

The plan is 4.85% or P40 billion lower than the P824-billion target for the first quarter.

The Treasury exceeded its borrowing goal in the first quarter as it raised P1.02 trillion amid strong demand for government securities early in the year on expectations of continued lower borrowing costs. The period also saw the issuance of new 10-year fixed-rate Treasury notes worth P297.94 billion — made up of P235 billion in new money and P62.94 billion via the switch program — well above the initial P30-billion offer.

For April, the government will auction off securities worth up to P248 billion, or P140 billion in T-bills and P108 billion in T-bonds.

Broken down, the BTr will offer 91-, 182, and 364-day T-bills on April 6, 13, 20, and 27.

For T-bonds, it will also sell three- and eight-year papers in a dual-tenor auction on April 7, five-year bonds on April 14, and seven-year debt on April 21. The BTr will hold another dual auction for four- and 10-year T-bonds on April 28.

In May, the Treasury is targeting to raise up to P268 billion from the local market, or P128 billion in T-bills and P140 billion in T-bonds.

Auctions for T-bills will be held on May 4, 11, 18, and 25.

Meanwhile, the government will offer three- and 20-year notes on May 5, five-year T-bonds on May 12, seven-year securities on May 19, and four- and 10-year bonds on May 26.

For June, it also looks to borrow up to P268 billion, or P128 billion via T-bills and P140 billion through T-bonds.

The BTr will offer T-bills on June 1, 8, 15, and 22.

Meanwhile, it will sell five-year T-bonds on June 2, three- and eight-year papers on June 9, seven-year notes on June 16, and four- and 10-year debt on June 23.

“The lower second-quarter borrowing plan reflects fiscal discipline and healthier cash buffers, so there’s less pressure to borrow at any cost. Demand will likely stay selective, with investors still pushing for higher yields amid global uncertainty, so we may continue to see partial awards,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

The BTr’s preference for shorter tenors was expected amid weakening appetite for longer-dated debt due to growing inflation worries amid the prolonged Middle East war, which has driven up oil prices, a trader said in a text message.

“There’s really no appetite for longer ones given the inflation picture for the medium term.”

The lower fundraising target for the second quarter could also reflect cautious government spending following the flood control scandal in 2025, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He added that expectations of rising borrowing costs and the peso’s depreciation may also dampen demand for government securities.