Treasury to sell P30B worth of retail bonds

The Bureau of the Treasury will issue at least P30 billion worth of three-year retail treasury bonds starting this week, marking the Duterte administration’s fourth time to sell government securities to small investors.

In a memorandum to eligible dealers of government securities on Friday, National Treasurer Rosalia V. de Leon announced the cancellation of the T-bonds auction scheduled for May 29 to pave the way for the RTB sale beginning May 30.

The fixed-rate RTBs due 2021, the 21st issuance of the Philippine government to date, will be offered to the public in minimum denominations of P5,000 until June 8, with settlement on June 13.

Last December, the Treasury raised P255.4 billion from RTBs, the largest issuance to date, selling the five-year IOUs at 4.625 percent.

In April last year, the Treasury sold P181 billion in three-year RTBs at a coupon of 4.25 percent.

In September 2016, the Treasury issued P100 billion in 10-year RTBs at a 3.5-percent yield.

As of end-April, outstanding RTB issuance has amounted to P1.2 trillion, the latest Treasury data showed.

Last week, the Department of Finance said that the share of debt to the Gross Domestic Product rose to 56.2 percent in the first quarter from 55.2 percent a year ago, “as the country advanced its borrowings ahead of the projected triple adjustments in the Fed policy rate.”

“The Treasury issued RTBs in December 2017 to take advantage of favorable rates. Thus, domestic debt rose to 36.5 percent of GDP from 35.4 percent the year before, offsetting the decline in the external debt,” Finance Undersecretary and chief economist Gil S. Beltran said in an economic bulletin.

Beltran said that a  “proactive debt management has afforded the Philippines an expanded fiscal space as the level of debt has declined significantly from 87.2 percent in 2006 to 42.1 percent in 2017–a 45.1 percentage point decline.”

“The excellent design and timing of borrowings has allowed the government to tap cheaper rates and longer maturities with higher volumes, enabling government to optimize savings for the ‘Build, Build, Build’ program and social expenditures,” Beltran added.