The National Government (NG) is planning to borrow P629 billion from the domestic market in the first quarter of 2025, as it seeks to frontload borrowings ahead of the May elections, the Bureau of the Treasury (BTr) said on Monday.
In a notice on its website, the BTr said it seeks to raise P264 billion from the issuance of Treasury bills (T-bills) and PHP 365 billion via Treasury bonds (T-bonds) in the January-to-March period.
“Higher offering amounts per auction of Treasury bills and Treasury bonds could also frontload/hedge some NG borrowings before the May 2025 midterm elections,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld.
In January, the government plans to borrow P213 billion domestically, consisting of PHP 88 billion in T-bills and PHP 125 billion in T-bonds.
The government will hold four auctions for T-bills in January and will try to raise PHP 7 billion via the 91- and 182-day tenors at each auction. It will also offer P8 billion in 364-day T-bills weekly.
Next month’s T-bill auctions will be held on Jan. 6, 13, 20, and 27.
The Treasury will offer PHP 30 billion in five-year T-bonds on Jan. 7, PHP 30 billion in seven-year T-bonds on Jan. 14, and PHP 30 billion in 10-year T-bonds on Jan. 21.
It also seeks to generate P35 billion from the auction of three-year and 25-year bonds on Jan. 28.
In February, the BTr will try to raise PHP 203 billion — PHP 88 billion via T-bills and P115 billion via T-bonds. It will borrow PHP 7 billion via the 91- and 182-day tenors at each auction, as well as PHP 8 billion via the 364-day T-bills.
T-bill auctions are scheduled on Feb. 3, 10, 17, and 24.
For the long-term debt, the government will offer P30 billion each in five-year T-bonds on Feb. 4, seven-year debt paper on Feb. 11, and 10-year T-bonds on Feb. 18. It seeks to raise P25 billion from 20-year T-bonds on Feb. 25.
For March, the Treasury seeks to borrow PHP 213 billion from the domestic market, comprised of PHP 88 billion from T-bills and PHP125 billion from T-bonds.
It scheduled four T-bill auctions in March. It will sell PHP 7 billion each in 91-day and 182-day T-bills, and PHP8 billion in 364-day T-bills at the auctions on March 3, 10, 17 and 24.
The BTr has four T-bond auctions scheduled for March. It will sell PHP 30 billion in five-year debt paper on March 4, PHP 30 billion in seven-year T-bonds on March 11, and PHP 30 billion in 10-year bonds on March 18.
The Treasury seeks to borrow a combined PHP 35 billion via three-year and 25-year bonds on March 25.
“We’re only able to see an expected increase in volume [in the borrowing plan] because there was a reduction in the fourth quarter,” a trader told BusinessWorld in a phone interview, adding the BTr will front-load its requirements this year.
In the fourth quarter of 2024, the government planned to borrow PHP 310 billion from the domestic market, but actually raised PHP 312.6 billion.
The trader also said that offering two T-bond tenors in the same auction is not an “extraordinary” event, noting it was done a few years ago.
For 2025, the NG plans to borrow PHP 2.55 trillion, 0.97% lower than PHP 2.57 trillion this year. Of this, domestic borrowings are set at PHP 2.04 trillion, while external borrowings are pegged at PHP 507.41 billion.
For 2025 to 2027, the NG plans to source at least 80% of its borrowing program from domestic sources, and 20% from foreign lenders.
The NG’s outstanding debt inched up to a fresh high of P16.02 trillion as of end-October amid the peso’s depreciation against the US dollar. Of the total debt stock, 67.98% came from domestic sources. — A.R.A.Inosante
This article originally appeared on bworldonline.com