Gov’t selling P30B in retail T-bonds

The government is set to sell P30 billion in retail treasury bonds in a bid to help fund its expenditure requirements and provide investment opportunities to individual investors.

In a public notice released Wednesday, the Bureau of the Treasury said an auction for the RTBs has been scheduled on July 30, which will be the start of the offering period as well. The sale will run for about two weeks until Aug. 13.

The peso-denominated bonds carry a maturity of 10 years. Interest rate on the RTBs will be set during the auction date.

The Treasury said government securities eligible dealers (GSEDs) have been invited to participate in the auction.

The P30 billion targeted to be generated from the sale of RTBs will make up a third of the P90 billion that the government intended to raise from sale of bonds this year.

Earlier, National Treasurer Rosalia de Leon said the Treasury would make sure that more individuals and small investors would actually get a bigger share of the supply of RTBs. She said the government agency wanted at least half of the RTBs to go to individuals and small investors.

She said that in the past, institutional investors got a bigger share of the supply of RTBs. She said GSEDs would be directed to ensure the allocation of at least half of the government securities to small and individual investors.

Unlike regular bonds, RTBs cater to individual investors in that the minimum investment requirement is only P5,000.

Meantime, the government is sourcing its entire commercial borrowing requirement this year from the local capital market.

De Leon said the domestic market was liquid enough to meet the government’s funding requirements. She also said foregoing foreign commercial borrowing this year would help reduce the exposure of the government to foreign-exchange risks.

In 2014, however, she said the government might go back to the international capital market to raise a smaller portion of the borrowing requirement for that year.

Borrowings made by the Treasury, largely through the sale of government securities, are intended to help plug an estimated budget deficit of P200 billion this year and help meet maturing obligations.