Gov’t sells retail bonds anew for budget support

The Bureau of the Treasury on Tuesday 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 they 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 thereafter.

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 and Overseas Filipino Bank mobile apps.

De Leon said the total amount to be raised from these debt paper will be used for budget funding. INQ