3-year RTBs for sale at 2.375%

MANILA, Philippines — The Bureau of the Treasury on Tuesday sold an initial P221.22 billion in three-year retail treasury bonds (RTBs) and expects to sell more to small investors up to March 4.

The RTBs fetched a coupon rate of 2.375 percent. Prior to the pandemic early last year, the Treasury issued three-year RTBs at a higher yield of 4.375 percent.

Despite the lower coupon, National Treasurer Rosalia V. de Leon said these IOUs still had a “better yield than time deposit.”

“[RTBs are] safe and low-risk. The biggest reward is contributing to recovery and nation-building,” De Leon added.

The rate-setting auction attracted P284.18 billion in tenders from government securities eligible dealers (GSEDs).

De Leon attributed the strong demand to “oozing” domestic liquidity, alongside investors’ “flight to safe haven” like government-issued debt.

On top of selling to new investors, the Treasury will also switch fresh RTBs with five bonds all maturing this year. “It’s a good rate to encourage holders to swap,” De Leon said.

While De Leon did not say how much they target to raise from the Philippine government’s 25th overall and the Duterte administration’s eighth RTB issuance, she said they expect more retail sales during the offer period.

These RTBs maturing in 2024 will be sold in multiples of P5,000 through banks, online channels, and mobile apps. Settlement will be on March 9.

In a statement, the state-run Land Bank of the Philippines said interested retail investors may purchase RTBs over-the-counter at all its branches; through the online ordering system on the Treasury’s website before settling the bonds via Landbank’s Link.BizPortal e-payment facility free of charge; or through the Overseas Filipino Bank (OFBank) mobile app, where buyers “can make multiple placements of up to P500,000 per transaction.”

“With the last two RTB issuances setting record subscriptions to date, we look forward to an even stronger reception for RTB-25 from the investing public. Aside from earning interest every quarter, investing in RTBs contributes to advancing the government’s COVID-19 response and economic recovery plan,” Landbank president and chief executive Cecilia C. Borromeo said.

The Treasury issued a record-high P516.3 billion in five-year RTBs called “progreso bonds” at a coupon rate of 2.625 percent in August last year, on top of P310.8 billion in three-year last February 2020.