Treasury selling 5-year RTBs at 2.625% coupon

MANILA, Philippines — The Bureau of the Treasury on Thursday started selling five-year retail treasury bonds (RTB), which fetched a coupon of 2.625 percent.

The Treasury awarded an initial P192.7 billion of the RTBs during the rate-setting auction, which attracted P278.6 billion in bids.

The RTBs will be sold to small investors in multiples of P5,000.

These RTBs maturing in 2025 will be offered until Aug. 7 or an earlier cut-off date to be determined by the Treasury. The settlement will be on Aug. 12.

The coupon was below the 6.25-percent yield of five-year RTBs sold last year, as well as lower than the 4.375 percent for three-year IOUs issued in February, which raised a record-high P310.8 billion.

“There is already a good pick-up with 2.625-percent coupon and results in real positive yield,” National Treasurer Rosalia V. De Leon said.

De Leon said they had no target for both new money and swap transactions.

Besides selling to new investors, this offering will also swap the new fixed-rate RTBs with two previously issued 10-year RTBs as well as two fixed-rate treasury notes (FXTN) maturing in August and next year.

De Leon was optimistic that “the online ordering platform and mobile app will allow us to reach far and wide small investors in this environment of safe distancing and quarantines.”

For the first time, RTBs can be purchased via UnionBank of the Philippines’ mobile app Bonds.PH, available on both Android and iOS devices.

Payment options for Bonds.PH users included InstaPay, PESONet, GCash, and PayMaya.

These RTBs will also be available via the online ordering facilities of China Banking Corp. (China Bank), Development Bank of the Philippines (DBP),

First Metro Securities and Brokerage Corp., as well as Land Bank of the Philippines (Landbank) and Overseas Filipino Bank (OFBank).

The app and online facilities can accept a maximum purchase of P500,000 per transaction.

This was the Duterte administration’s seventh RTB issuance and the Treasury’s 24th overall.

Last week, De Leon said the money to be raised from selling these RTBs will be used as budgetary support.