The government set a P170-billion borrowing program for August. — BRENT LEWIN/BLOOMBERG

THE government is planning to borrow P170 billion from the domestic market in August, nearly a fifth lower than the July borrowing program, the Treasury said on Wednesday.

The Bureau of the Treasury (BTr) is also offering longer term papers next month as investors seek higher returns.

In an advisory on Wednesday, BTr said it plans to raise P110 billion in Treasury bills (T-bills) and P60 billion in Treasury bonds (T-bonds) next month. This is 17% lower than the P205-billion borrowing plan for July, but similar to the program in June and May.

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

BTr will offer P5 billion worth of 91- and 182-day debt papers each, and P10 billion worth of 364-day securities every Monday. It will auction off P15 billion worth of 35-day instruments every other Tuesday — on Aug. 4 and Aug. 18.

The Treasury is looking to raise P30 billion from the issuance of 10-year notes on Aug. 11, and another P30 billion from 20-year T-bonds on Aug. 25.

National Treasurer Rosalia V. de Leon said the longer tenors are being offered to accommodate investors seeking higher returns, as rates continued to slide.

“(Market participants are in) search for yields and some investors need long tenors to match their asset liability management like insurance companies,” Ms. De Leon said in a text message on Wednesday.

Kevin Palma, peso sovereign debt trader of Robinsons Bank Corp., said investors will continue to flock to government securities for safety next month, but some players will shift to longer tenors for higher yields.

“Demand for (government securities) is still expected to spill over in August more so for the offerings on the front end of the curve as dealers and investors alike may continue to park excess liquidity on that sector,” Mr. Palma said via Viber.

“With local bond yields not expected to tick higher anytime soon due to relatively benign inflation amid our current battle with the global pandemic, the market may continue to hunt for higher yields which the 10-year and 20-year can offer,” he added.

In July, the government raised P165.5 billion via government securities.

The Treasury has canceled three scheduled auctions during the month to give way to the public offer of retail Treasury bonds (RTBs) which is set to run until Aug. 7.

Ms. De Leon has said the amount so far has already exceeded the record P310 billion in three-year retail bonds sold in February. — Beatrice M. Laforga