THE BUREAU of the Treasury (BTr) plans to raise P140 billion from the local debt market next month, offering longer bond tenors to cater to investors in search of higher yields.

The BTr said in an advisory posted on its website that it will borrow P80 billion via Treasury bills (T-bills) to be offered every week and P60 billion through fortnightly Treasury bond (T-bond) auctions, steady from the January program.

“Given very low rates, (investors) may have interest on long end for yield pickup and demand from lifers and pension funds,” National Treasurer Rosalia V. de Leon said in a Viber message on Wednesday.

The Treasury will offer P20 billion in T-bills every Monday next month starting Feb. 1, broken down into P5 billion each in 91-day and 182-day debt and P10 billion in 364-day securities.

Meanwhile, the T-bonds will be offered every other Tuesday: P30 billion in 10-year notes on Feb. 2 and P30 billion in three-year bonds on Feb. 16.

The government only offered five-year and seven-year T-bonds this month.

The Treasury this month raised P211.575 billion through its auctions of government securities, exceeding the P140-billion program after upsizing its awards of T-bills and opening its tap facility after all its offerings.

Broken down, the government this month raised P121.575 billion from its T-bill auctions and P90 billion via T-bond offerings, exceeding the programmed P80 billion and P60 billion, respectively.

A trader said with the market still awash with cash, government securities will continue to attract strong interest.

“It is a good decision on BTr’s part given the robust liquidity. There is demand for the three-year paper given the search for yield. It is also ripe for the BTr to issue 10-year bonds to take advantage,” a bond trader said in a Viber message on Wednesday.

“However, GDP (gross domestic product) data will give us a clearer picture as to where we are in terms of recovery. A worse than expected figure will boost demand for next month’s issuance barring any announcement of huge supply ahead of March maturities,” the trader added.

The Philippine Statistics Authority (PSA) is set to release preliminary GDP data for the fourth quarter and full-year 2020 today.

A BusinessWorld poll of 18 economists and an institution last week yielded a median estimate of a 8.5% GDP contraction for the fourth quarter and a 9.5% slump for the full year. Economic managers said last year’s GDP may have dropped by 8.5-9.5%

The PSA on Wednesday revised its data on the third quarter GDP to a contraction of 11.4% from the previous estimate of an 11.5% slump.

The economy shrank by 10% in the first nine months of 2020 after the record 16.9% decline in the second quarter and the 0.7% contraction in the first three months.

The government plans to raise around P3 trillion this year from local and foreign lenders to help fund its budget deficit, which is expected to hit 8.9% of the country’s economic output. — Beatrice M. Laforga

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