THE TREASURY will raise P140 billion from the local market next month. — BW FILE PHOTO

THE BUREAU of the Treasury (BTr) has set a P140-billion borrowing program for January, higher than the previous month, on expectations that demand will remain robust at the start of 2021.

In an advisory on its website, the BTr said it is planning to borrow P80 billion via Treasury bills (T-bills) and P60 billion from Treasury bonds (T-bonds) next month.

The January borrowing program is higher than the P120-billion plan for December. The Treasury fulfilled its borrowing program this month, making full awards of all its offerings and even opening its tap facility, even as some debt papers saw slightly higher yields.

“Program is based on auction performance during this quarter and market expectations on monetary authorities policy actions going into next year,” National Treasurer Rosalia V. de Leon told reporters via Viber on Tuesday.

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

Every Monday, the BTr will offer P5 billion each in 91- and 182-day T-bills and P10 billion in 364-day securities.

Meanwhile, it will auction off P30 billion in five-year T-bonds on Jan. 5 and another P30 billion in seven-year notes on Jan. 19.

“We will start 2021 with a likely hefty demand given the attractive tenors the government is offering for the month of January if we were to based on previous auctions,” Kevin S. Palma, peso sovereign debt trader of Robinsons Bank Corp., said in a Viber message on Tuesday.

“With COVID-19 still very much at large all over the world, most central banks will likely keep its accommodative stance to combat its effects on the economy thereby liquidity is still expected to remain abundant,” Mr. Palma added.

The Bangko Sentral ng Pilipinas’ (BSP) Monetary Board, in its last policy-setting meeting for the year on Dec. 17, kept benchmark interest rates unchanged at record lows.

The central bank cut rates by a total of 200 basis points (bps) this year. Many analysts expect that the BSP will continue to maintain a low interest rate environment to help spur economic recovery, with some saying it may even resume its easing cycle next year.

The government wanted to raise around P3 trillion this year from local and foreign lenders to help fund its budget deficit, which is expected to hit 7.6% of the country’s gross domestic product (GDP).

Gross borrowings reached P3.224 trillion in the first 10 months of 2020, exceeding the full-year program after the BTr received the new round of cash advances from the central bank in October worth P540 billion.

For next year, the government plans to borrow another P3 trillion to plug a projected deficit of 8.9% of GDP. — Beatrice M. Laforga