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Wednesday, April 24, 2024

Government set to borrow ₧235 billion in July; to exploit liquidity

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THE Bureau of the Treasury is set to borrow P235 billion from the local debt market in July, slightly higher than the P215 billion it programmed in June.

The Treasury is aiming to raise the amount next month through auctioning off P60 billion in Treasury Bills (T-bills) and P175 billion in Treasury Bonds (T-bonds).

National Treasurer Rosalia V. De Leon told the BusinessMirror they are “taking advantage of very liquid market with RTB [Retail Treasury Bond] redemption.”

The Treasury still plans to sell P50 billion in government securities every week. It has maintained its previous schedule of holding weekly auctions for T-bills and T-bonds.

For T-bills, the Treasury is set to offer P15 billion in 91-day, 182-day and 364-day T-bills for each of the four Mondays of July.

Apart from this, the Treasury will be selling P35 billion in T-bonds on June 29 and all four Tuesdays of July. If government declares July 20 (Tuesday) a holiday in observance of Eid’l Adha, the auctions would be moved to July 21, Wednesday.

Last Tuesday, the Treasury fully awarded P35 billion in reissued 10-year T-bonds as investors continue to search for higher yields.

The auction was almost twice oversubscribed as total submitted bids hit P65 billion.

The security also fetched an average rate of 3.185 percent, down by 54.7 basis points from the previous yield of 3.732 percent when it was last reissued in March this year.

With a remaining life of 5 years and 10 months, the debt paper is set to mature on May 4, 2027.

De Leon said she still expects to see strong investor appetite in the following auctions.

“[Investors] recycling funds from redemptions. Markets looking at yield pick-up; so looking at longer tenors,” she said.

On top of the primary auction, De Leon said they also decided to offer an additional P5-billion in reissued 10-year T-bonds via tap facility.

For this year, the national government has set a P3.03-trillion gross borrowing program, roughly the same amount it borrowed in 2020.

Eighty percent of the amount is programmed to be raised through domestic sources while the remaining 20 percent is expected to come from foreign sources.

Read full article on BusinessMirror

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