Treasury to sell RTBs ahead of Christmas holidays

Ahead of the Christmas holiday season, the government will sell at least P30 billion in five-year retail treasury bonds (RTBs) next week, the Duterte administration’s third time to borrow from small investors.

In a Nov. 16 notice of offering to government securities eligible dealers, the Bureau of the Treasury said the peso-denominated fixed-rate debt paper will be offered to the public at a minimum of P5,000 on Nov. 20-29, with issuance on Dec. 4.

The rate-setting auction will also be on Nov. 20. As such the Treasury canceled the T-bonds auction scheduled on Nov. 21.

“We are always on the lookout for opportunities that would allow us to fund the Philippine government’s financing requirements, taking into consideration emerging conditions in the market. RTBs have been a staple platform in the government’s financing program. In the past, we have been able to take advantage of ample domestic liquidity and reduce foreign exchange exposure,” National Treasurer Rosalia V. de Leon said in a statement.

“We recognized the significant contributions of RTBs. At the macro level, these have helped in funding the Philippines’ infrastructure requirements. At the individual level, we have seen that retail treasury bonds have been effective in introducing many Filipino families to the concept of investing,” de Leon added.

From March to April this year, the government sold P181 billion in three-year RTBs—P70 billion during the rate-setting auction on top of the additional P111 billion during the public offer period.

The Philippine government’s 19th RTB issuance attracted a total of P500 billion in tenders, making the IOUs oversubscribed by over 16 times the initial issue size of P30 billion.

For the 19th RTB issuance, the coupon rate was set at 4.25 percent for the bonds maturing on April 11, 2020.

In September last year or within the Duterte administration’s first six months in office, the Treasury also issued P100 billion in 10-year RTBs at a 3.5-percent yield.

The 18th RTB sale of the Philippine government was the first issuance under President Duterte, aimed at augmenting funds for programs part of the administration’s 10-point socioeconomic agenda, especially infrastructure projects.

Meanwhile, the Treasury on Thursday only partially awarded the T-bills it offered, raising only P18.5 billion out of the P20-billion offering.

The P8-billion 91-day treasury bills and the P6-billion 182-day IOUs were both fully awarded, but just P4.5 billion of the P6-billion 364-day debt paper were sold.

“The 91- and 182-day T-bills fetched average rates of 2.148 percent and 2.563 percent, respectively, while the 364-day rate was capped at an average of 2.952 percent,” the Treasury said in a separate statement.

“Demand for the short-dated bills remained robust as total tenders reached P29.9 billion against the P20-billion offer,” the Treasury added. /je