BTr to offer securities worth P135B in Q1

The government plans to sell P135 billion worth of treasury bills and bonds in the first quarter of the coming year, according to the Bureau of the Treasury.

The amount represents a nearly 10-percent rise from the P122.96 billion worth of government securities sold in the domestic market in the same period of 2013.

The decision to raise domestic borrowings came on the heels of the government’s announcement to hike public expenditures for infrastructure and social services.

The government has been forced to beef up spending and support reconstruction activities in areas affected by Supertyphoon “Yolanda,” which devastated the Visayas last month.

To accommodate the higher spending, the government is ready to post a higher budget deficit and borrow more in 2014.

In the notice posted on its website, the Treasury said P60 billion worth of T-bills and P75 billion worth of T-bonds would be auctioned off in January to March.

About P4 billion worth of 91-day T-bills and P6 billion worth of 182-day bills, as well as P10 billion in 364-day notes will be sold each month.

Also, P25 billion worth of bonds will be sold each month.

Finance Secretary Cesar Purisima told reporters that the government would continue to borrow more from the domestic than the foreign market in the coming year.

This will allow the government to minimize its exposure to foreign-exchange risks, he explained.

The government does not need to borrow abroad if it does not want to, Purisima said. “The domestic market has a lot of liquidity.”

In 2013, the government did not sell sovereign bonds in the foreign commercial market. The decision helped to ease the sharp appreciation of the peso last year.

However, Purisima said the government would sell sovereign bonds abroad in 2014 to help maintain the Philippines’ presence in the international market.

Keeping foreign portfolio investors familiar with Philippine bonds has its merits, he said. It will help ensure that the country will always have access to funding abroad.

The government has yet to finalize its foreign borrowing program for the coming year, but there is a proposal for it to sell $1 billion worth of sovereign bonds offshore in the first quarter.

The government will also tap cheap loans from foreign development institutions, including World Bank, Asian Development Bank, and Japan International Cooperation Agency.