Government prepares local bond market plan for October as PH debt hits P11.64T

The Treasury Office will borrow 200 billion pesos on the domestic debt market in October, adding to the national government debt which hit a new high of 11.64 billion pesos in August.

In a September 29 memorandum to all eligible government securities brokers, National Treasurer Rosalia de Leon said the Treasury will auction 60 billion pesos in treasury bills and 140 billion pesos in bonds next month. .

The Treasury maintained its weekly auction volume of 15 billion pesos of short-term treasury bills – 5 billion pesos each in benchmark 91, 182, and 364-day securities – for each of the four Mondays in October.

The Treasury will also sell 35 billion pesos each in bonds every Tuesday next month, with maturities of seven years on October 5 and 26, five years on October 12 and six years on October 19.

“The national government’s borrowing program for 2021 will continue to come mainly from the domestic market. This is to further reduce the country’s exposure to foreign currency volatility and contribute to the development of the domestic capital market, ”the Development Budget Coordination Committee said in a report on Thursday.

For 2021, the government plans to mobilize 81% of funding from local sources. About 2.49 trillion pesos will be raised this year from treasury bills and bonds out of total scheduled borrowing amounting to a record 3.07 trillion pesos.

The latest data released Thursday showed that the stock of national government bonds in August rose 0.3% from 11.61 trillion pesos last July, mainly due to additional domestic borrowing.

Compared with a year ago, the outstanding debt at the end of August was 21.1% higher than the 9.62 billion pesos in the same month last year.

The stock of domestic debt at the end of August reached 8.22 trillion pesos, or 70.6% of the total.

Locally sourced debt increased 1.2% month-on-month and 22.5% year-on-year.

External debt, on the other hand, fell 2 percent month-on-month to 34 trillion pesos in August, even as foreign bonds climbed 17.9 percent year-on-year.

The Treasury attributed the monthly decrease in external debt mainly to P34.2 billion in net repayment of loans granted by development partners.

The peso’s slight appreciation to 49.762 against the US dollar at the end of August also helped reduce the value of foreign debt by a total of 34.4 billion pesos.

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