Strong demand for RTBs reflects confidence in gov’t

The warm market reception to the Bureau of the Treasury’s retail treasury bonds (RTBs) offering reflected confidence in the Duterte administration, the Department of Finance said (DOF) Wednesday.

“The positive response of the market to the Duterte administration’s inaugural offering of RTBs—as illustrated by what the Treasury itself has described as the ‘considerable demand’ for these bonds on Day One of the auction—has demonstrated that investors remain bullish on the Philippines and were not affected by safety concerns arising from the recent bombing in Davao City,” DOF spokesperson Paola Alvarez said in a statement.

Last Tuesday, the Treasury accepted P65 billion in bids to kick off the first issuance of RTBs in three years, selling at an annual rate of 3.466 percent. The Treasury received a total of P123.7 billion in tenders for the 10-year debt paper, with the coupon rate set at 3.5 percent.

“Originally announced at P30 billion, the committee increased the amount on offer to P65 billion as bid rates aligned with secondary market levels and propped up by considerable demand, which was more than four times the original offer amount,” National Treasurer Roberto B. Tan said in report to Finance Secretary Carlos G. Dominguez III after the first day of auction.

“The expanded issuance aims to ensure that the RTB attains its goals of reaching a wide investor base and mobilizing domestic savings. The funding exercise is part of the financing program to meet the government’s requirements as it aims to increase infrastructure spending and improve the provision of social services,” Tan said.

“During the nine-day public offer period, the Treasury can opt to further increase the offer amount, depending on orders from the public. Subsequently, there will be a series of roadshows in key cities across the country to educate the general public on the features and advantages of investing in the RTBs,” Tan added.

To better promote the debt offering aimed at small investors, the Treasury will embark on roadshows to promote the RTBs in the cities of Davao, Cebu, Cagayan de Oro, Iloilo, Naga, Batangas, Baguio, Makati and Manila.

The proceeds of the 18th RTB tranche of the Philippine government would be used as buffer to finance projects to be rolled out for the rest of the year, Tan had said.

The fixed-rate bonds will be sold until Sept. 16 by 15 selling agents: Banco de Oro Universal Bank, China Banking Corp., Citibank N.A., Development Bank of the Philippines, East West Banking Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine Bank of Communications, Rizal Commercial Banking Corp., Security Bank Corp., ING Bank, BPI Capital Corp., First Metro Investment Corp., Robinson Bank Corp. and BDO Capital and Investment Corp.

The RTBs will be sold to individuals, corporations (except state-run firms), financial institutions as well as institutional investors. Ben O. de Vera