MANILA, Philippines — The Bureau of the Treasury will again sell retail treasury bonds (RTB) starting July 15 not only to raise funds for COVID-19 response but also make available an investment opportunity during these trying times.
Presidential Spokesperson Harry Roque announced in a Palace briefing on Monday the Duterte administration’s seventh RTB issuance and the Treasury’s 24th overall.
National Treasurer Rosalia V. de Leon confirmed that the rate-setting auction will be on Wednesday next week, while other details such as tenor will be released within this week.
“We are taking advantage of low [interest] rates and providing secure investment outlets,” de Leon said.
RTBs were usually sold in denominations of P5,000 so retail investors can afford them.
For de Leon, issuing RTBs amid the COVID-19 crisis was a “win-win proposition and demonstrates our solidarity against the pandemic.”
Last February, the Treasury issued a record P310.8 billion in three-year RTBs at 4.375 percent, despite a shortened offer period amid robust demand from small investors.
De Leon had said that the Treasury wanted more banks to offer RTBs online, instead of just the state-run lenders Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) as in the past few offers.
Also on Monday, the Treasury awarded P24 billion in treasury bills as rates fell across the board.
For the benchmark 91-day T-bill, the Treasury sold P7 billion or P2-billion more than the P5-billion offering at an average rate of 1.649 percent, down from 1.746 percent during last week’s auction.
The Treasury also awarded P7 billion in 182-day IOUs—bigger than the P5 billion it offered—at 1.75 percent, down from 1.892 percent previously.
The P10 billion in 364-day debt paper, meanwhile, were sold at an annual rate of 1.855 percent, down from 1.98 percent.
Across the three tenors, tenders totaled P116.9 billion, making the auction almost six times oversubscribed the original P20-billion offer.
De Leon attributed the decline in T-bill rates and strong demand to flush domestic liquidity as a result of the Bangko Sentral ng Pilipinas’ (BSP) 50-basis points (bps) interest rate cut last June 25.
Also, de Leon said P38.35 billion in government securities had matured, plowing more money back into the financial system.