More debts: Retail treasury bond sale eyed before 2021 ends

MANILA, Philippines—The Bureau of the Treasury plans to again sell retail treasury bonds (RTBs) before 2021 ends to take advantage of oozing domestic liquidity while rates stabilize alongside easing inflation.

“We’re planning for an RTB sale as markets are still looking for outlets to deploy liquidity,” National Treasurer Rosalia de Leon said on Monday (Nov. 8). She did not say when exactly the Treasury planned to sell RTBs, aimed at small investors.

De Leon said the volume of the forthcoming RTB issuance would be “not jumbo” — hence smaller than recent issues. Last March, the Treasury raised P463.3 billion from three-year RTBs — the government’s 25th overall and the Duterte administration’s eighth RTB issuance.

Last year, the Treasury issued a record-high P516.3 billion in five-year RTBs called “progreso bonds” to raise money for pandemic response and economic recovery programs.

De Leon did not reply when asked if the yearly “premyo bonds” — one-year debt paper sold to investors who wanted to win raffle prizes during the Christmas season — would still be offered despite the plan to sell RTBs again before end of 2021.

For 2021, the government had programmed to borrow a total gross amount of P3.07 trillion, of which locally sourced borrowings through treasury bills and bonds would account for the bigger chunk of P2.49 trillion.

Monday’s T-bills auction awarded all of the P15 billion in short-dated securities that the Treasury offered — P5 billion each for the three tenors, even as rates rose across-the-board.

The average rate for the benchmark 91-day treasury bills inched up to 1.143 percent from 1.13 percent last week. The 182-day rate also increased to 1.401 percent from 1.395 percent previously.

The 364-day IOUs fetched an annual rate of 1.616 percent, up from 1.613 percent during the previous auction.

“Following the deceleration in inflation and [expectations of] no market tantrum to the US Federal Reserve’s announcement of taper, we do not see a significant rise in rates” moving forward, De Leon said.

Headline inflation eased to a three-month low of 4.6 percent in October as slower food price hikes offset a jump in oil prices, although the average 4.5-percent rate of increase in prices of basic commodities during the first 10 months remained above the 2 to 4 percent range that the Bangko Sentral ng Pilipinas (BSP) considered as manageable consumer price hikes.

Tenders totaled P42.5 billion across the three T-bill tenors, making the auction nearly thrice oversubscribed.

TSB