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Gov’t raises P150B from sale of RTBs

Offer period cut short as demand exceeded P30-B target

By: Michelle V. Remo, August 5th, 2013 10:44 PM


The government ended Monday the offer period for retail treasury bonds (RTBs) after raising P150 billion from the sale of the popular debt paper.

The offer period, within which banks acting as government securities eligible dealers (GSEDs) may buy RTBs from the Bureau of the Treasury, was originally scheduled to run from July 30 to August 13. However, the Treasury decided to cut short the offer period given that the amount raised has exceeded expectations. The government originally intended to raise only P30 billion from this year’s sale of RTBs.

“We have raised P150 billion from the sale and we are ending it there,” De Leon told reporters Monday. However, De Leon said banks have until August 13 to sell to the public the RTBs they have bought.

The RTBs carry a 10-year maturity and a yield of 3.25 percent.

“We are extremely pleased with the outcome of the RTB issuance. This reflects how liquid the market is and how people are becoming more aware of the value of investing,” De Leon noted.

She said a big portion of the funds withdrawn from special deposit accounts (SDAs) at the central bank was believed to have boosted demand for RTBs. The Bangko Sentral ng Pilipinas recently issued a directive prohibiting retail funds from its SDA facility. De Leon said this prompted fund owners to shift to government securities like the RTBs.

De Leon said banks were required to sell at least 20 percent of the RTBs they bought—net of RTBs they sold to government-owned corporations—to retail buyers to ensure that the objective of the RTB offering of providing investment opportunities to small individual investors was achieved.

De Leon said banks that would fail to comply with the directive would get “demerits,” which could affect their ability to buy RTBs in future offerings of the government.

She said that of the P150 billion worth of RTBs sold to banks, P26.88 billion was allocated to government-owned corporations.

Proceeds from the sale of the RTBs will be used largely to pay for the government’s maturing obligations and partly to help fund the government’s projected budget deficit of P200 billion this year.

The government has held RTB offerings annually. Last year, the government raised P188 billion from the sale of RTBs.

Unlike regular government securities, RTBs are fit for small and individual investors because the minimum investment is just P5,000.

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