THE government is planning to borrow at least P140 billion from the domestic market through the sale of government securities in November, as investors remain liquid and cautious amid the pandemic.

In an online advisory posted on Wednesday, the Bureau of the Treasury (BTr) said it will borrow P80 billion in Treasury bills (T-bills) and P60 billion in Treasury bonds (T-bonds) next month.

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

For the T-bills, the BTr will auction off 91-day and 182-day papers worth P5 billion each and 364-day papers worth P10 billion.

For the T-bonds, it will offer three-year papers and five-year papers worth P30 billion each on Nov. 5 and Nov. 19, respectively.

National Treasurer Rosalia V. de Leon said the new borrowing program matches the market preference for short- and medium-term debt.

“It is based on previous auction results with the intermediate part of the curve as the sweet spot,” she said in a Viber message on Wednesday.

Ms. De Leon attributed this to the central bank’s projections of benign inflation in the next two years and strong liquidity among investors.

The Bangko Sentral ng Pilipinas slashed inflation forecasts to 2.3% for this year, 2.8% for 2021, and 3% for 2022.

Economists said the pandemic increased demand for medium-term bonds.

“With domestic activity still hobbled by concerns about the virus and overall challenging job market, we do expect investors to park their excess cash on the belly of the curve,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

“The market right now is still very liquid and it’s just prudent to put excess cash at the short-end of the curve amid ongoing uncertainties. Investors are also waiting for further guidance from the government to spur more economic activities,” a trader who asked not to be identified added via Viber.

Ms. De Leon said the November borrowing program is aligned with the government’s P3-trillion target this year from local and foreign lenders to help fund its budget deficit expected to hit 9.6% of the country’s gross domestic product.

The Treasury also plans to raise P3 billion from the issuance of Premyo bonds next month.

“As always, we continue to continuously scan good opportunities for financing. We prepare and get ready to strike,” Ms. De Leon said. — K.K.T.Jose