The Marcos Jr. administration will need to borrow up to P2.2 trillion pesos next year to sustain the nation’s economic growth trajectory, the chief economist at China Bank said Monday.

In an interview, Domini Velasquez said the P30 billion Retail Treasury Bonds issue under the Marcos Jr. administration would support the government’s spending program and ensure the continuity of its economic plans.

“The borrowing requirement in 2023 will amount to P2.2 trillion. The issuance of the peso-denominated RTBs is also part of the government’s recalibration of the debt mix, relying more on peso debt [75 percent] instead of foreign currency debt,” Velasquez told Daily Tribune.

For his part, Michael Enriquez, president and chief investment officer of Sun Life Investment Management and Trust Corp., said, “the 5.5-year RTB is a good way for the Bureau of Treasury to pre-fund their liquidity needs.”

“This would help stabilize interest rates and would also give an opportunity for retail investors to deploy their excess funds to higher-yielding securities issued by the government,” he added.

Moreover, part of the offer of the new RTB is also to allow the holders of the previous RTBs to exchange bonds that will lapse soon for longer-tenor bonds. This lengthens the maturity of the debt of the government, Velasquez added.

RTBs are medium to long-term investments issued by the government through the BTr.

Meanwhile, rates of Treasury bills could increase this week as the government’s upcoming retail bond offer is expected to reduce liquidity in the market.

The BTr will offer P15 billion in T-bills on Monday, or P5 billion each in 91-, 182- and 364-day securities.

The BTr canceled T-bond auctions on 23 August to make way for its sale of five-and-a-half-year RTBs.

The Bangko Sentral ng Pilipinas raised its benchmark interest rate on Thursday and signaled it has room to hike rates further as it battles inflation.

The Monetary Board increased the overnight reverse repurchase rate by 50 bps to 3.75 percent, as expected by 13 out of 18 analysts in a BusinessWorld poll.

The overnight deposit and lending facilities rates increased to 3.25 percent and 4.25 percent, respectively.

The BTr will sell at least P30 billion in five-and-a-half-year RTBs this month, its second RTB offer this year. The offer period for the peso-denominated debt is 23 August to 2 September 2022.