Treasury cuts domestic borrowing in December – Manila Bulletin

By on November 25, 2021 0

The Treasury Office cut its national borrowing program for December due to strong demand for the outstanding retail bond supply and fewer working days.

National Treasurer Rosalia V. de Leon said Thursday, November 25 that the national government plans to borrow just 70 billion pesos from local creditors next month, down 65% from the 200 billion pesos program in November. .

“There will be less auctions given the Christmas holidays,” de Leon told reporters.

“In addition, given that we have seen a high demand for our current RTB [retail treasury bond] 26, we have the option of reducing the size of our December auctions, ”she added.

Based on a November 24 memorandum, the Treasury plans to borrow 70 billion pesos of short- and long-term debt in December.

During the month, the government will borrow 30 billion pesos through treasury bills, as it seeks to raise 40 billion pesos through the sale of treasury bonds (T-bonds).

The Treasury maintained its regular three-month, six-month and one-year IOUs at P10 per offer, broken down into P5 billion each for 364 days and P3 billion for 182-day papers as well as P2 billion for 91-day securities.

The auction for short-term items will take place on December 1, 7 and 15.

T bonds, meanwhile, will be sold at 20 billion pesos per offer. The 10-year papers will be auctioned on December 9 and December 16 for the seven-year instruments.

On November 16, the government launched a five-and-a-half-year RTB offering with a coupon rate of 4.625%. The offer period runs until November 26, Friday, which will be sold in multiples of P5,000.

In addition, existing holders of RTBs maturing on January 19 and 26, 2022 can also swap their holdings for the new 2027 retail bonds.

De Leon said the proceeds from the new RTBs would be used to support the government’s budgetary needs.

The last time the government sold debt to retail investors was in February, when it borrowed 463.3 billion pesos of three-year securities, RTB’s second biggest sale never recorded.

The sale of RTB is part of the government’s goal of encouraging Filipinos to save by lending their excess money to the government in return for a secure return on their investment.

In October, the Treasury office raised $ 1.59 billion from the sale of the first onshore dollar retail bonds.

The five-year and 10-year RDBs carried coupons of 1.375% and 2250%, respectively. They were offered in minimum investments of $ 300 and in multiples of $ 100 thereafter.

The Duterte administration’s first RDB sale followed the $ 3 billion in global bonds sold in June, $ 2.5 billion in euro-denominated bonds in April and $ 500 million in “Samurai” bonds denominated in yen in March.