Treasury raises P113B in new debts through RTBs
MANILA, Philippines—The Bureau of the Treasury on Tuesday (Nov 16) raised an initial P113.5 billion in 5.5-year retail treasury bonds (RTBs) and set the coupon rate at 4.625 percent per annum.
The rate-setting auction attracted over P165 billion in tenders or 5.5 times more than the minimum P30-billion offering.
Bid rates hit a high of 4.7 percent and a low of 4.25 percent or an average of 4.564 percent. The coupon will be the interest rate to be earned by investors from the bonds they purchased.
“The RTBs attracted strong demand with tucked-in premium over secondaries in consideration of larger volume and expectation of rates climbing up as the era of loose monetary policies comes to a close starting with the Fed [US Federal Reserve’s] taper announcement,” National Treasurer Rosalia de Leon said.
De Leon said the Treasury had no target volume for the government’s 26th overall and the Duterte administration’s ninth RTB sale, although she had said this round won’t be a “jumbo” issuance like the preceding fund-raising from these bonds aimed at small investors.
Two sets of IOUs maturing in January 2022 can also be switched to the new RTBs.
The offer period started on Tuesday and ends on Nov. 26. Investors will have to shell out a minimum investment of P5,000 and its increments after.
These RTBs can be purchased over-the-counter in participating banks as well as from the Treasury’s online ordering facility plus Bonds.PH, Land Bank of the Philippines (Landbank) and Overseas Filipino Bank (OFBank) mobile apps.
De Leon said the total amount to be raised from these debt paper will be used for budget funding.
“Investing in RTBs provides investors a safe way to grow their hard-earned savings, and ultimately provide their loved ones the best Christmas gift — a brighter and more secure future,” De Leon said during the RTB’s launch.
On top of RTBs’ higher returns compared to conventional time deposits, De Leon said “every peso investment goes a long way in supporting our economic recovery from the pandemic, creating jobs, and implementing livelihood programs.”
De Leon noted that the three preceding RTB issuances raised P1.2 trillion to finance the budget as well as COVID-19 response.
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