THE NATIONAL Government (NG) plans to borrow P180 billion from the domestic market in September, the Bureau of the Treasury (BTr) said on Wednesday.

The September borrowing plan is 20% lower than the P225-billion program for August. However, it is a tad higher than the actual P179.17 billion raised by the government this month.

According to the BTr, the government plans to borrow P60 billion from T-bills, and P120 billion via T-bonds in September.

Broken down, the government will offer P5 billion worth of 91-day, 182-day, and 364-day T-bills on Sept. 4, 11, 18 and 25.

For the long-term tenors, the BTr will offer P30 billion in three-year T-bonds on Sept. 5 and P30 billion in seven-year T-bonds on Sept. 12.

It will auction off P30 billion in 10-year T-bonds on Sept. 19, and P30 billion in three-year bonds on Sept. 26.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the September borrowing plan is still in line with the overall program.

“Rates will still likely take their cue from global bond movements and the outlook for domestic inflation,” he said in a Viber message.

Headline inflation slowed for a sixth straight month to 4.7% in July from 5.4% in June. For the seven-month period, inflation averaged 6.8%, still above the central bank’s 5.6% forecast.

The Philippine Statistics Authority will release the consumer price index data for August on Sept. 5.

“BTr appears to have a strong cash position and with inflation moderating we could see rates edge lower due to domestic factors. This, however, can always be superseded by global developments should US Treasury yields rise if US data prints on the upside,” Mr. Mapa said.

Yields in the secondary market and benchmark US Treasury will likely continue to ease in September amid expectations of a pause at the US Federal Reserve’s next meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Reuters reported Treasury yields slid to three-week lows on Tuesday but were stable in Asian hours. The two-year yield, which typically moves in step with interest rate expectations, was up 3.3 basis points at 4.923%, easing away from the three-week low of 4.871% it touched on Tuesday.

Markets are pricing in an 89% chance of the Fed standing pat at its meeting next month, the CME FedWatch tool showed, and are now pricing in a 50% chance of another pause at the November meeting compared with a 38% chance a day earlier.

The government’s gross domestic borrowing program this year is set at P1.654 trillion, composed of P54.1 billion in T-bills and P1.6 trillion in fixed-rate T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 6.1% of the gross domestic product this year. — AMCS with Reuters