More debts: Treasury raises P360B from 5.5-year RTBs

MANILA, Philippines—The Bureau of the Treasury has raised P360 billion from 5.5-year retail treasury bonds (RTBs) and added P10 billion in T-bills on Monday (Nov.29) to secure the borrowings it programmed for 2021 ahead of the Christmas holidays.

In a statement, the Treasury said the 11-day RTB offering that ended last Friday (Nov. 26) generated P330.5 billion in new money plus P29.5 billion from the switch with two bond series maturing early next year.

The RTBs sold from the government’s 26th overall and the Duterte administration’s ninth issuance will be settled on Thursday (Dec. 2).

“The healthy macroeconomic environment, characterized by sufficient domestic market liquidity and downward trend in inflation supported our third retail issuance, or the second peso-denominated jumbo offering for the year,” National Treasurer Rosalia de Leon said.

The Treasury also issued three-year RTBs in March and sold the first-ever, dual-tranch retail dollar bonds (RDBs) last October to small investors.

“With the digital platforms that we have introduced in the past years, we have also seen how more and more Filipinos are getting into the habit of investing their hard-earned money to secure the future not only of themselves, but also of their loved ones,” said De Leon.

“As such, we at the Treasury will continue to introduce new products and channels in the future to allow our individual investors to diversify their personal portfolios, as well as reduce the friction costs and barriers to investing,” De Leon said. The Treasury’s RTB and RDB offerings had been made available in its online ordering facility plus participating banks’ mobile apps.

De Leon said the latest RTB proceeds will be injected into the national budget to “help the country respond to the challenges posed by the pandemic and support various programs for economic resiliency and recovery.”

On Monday, the Treasury sold all of the P10 billion in short-dated debt paper it offered—P2 billion in the benchmark 91-day, P3 billion in 182-day and P5 billion in 363 day (shorter than usual by one day due to the Nov. 30 holiday).

Rates went sideways—the three-month yield eased to 1.164 percent from 1.178 percent last week, while the average rate for six-month IOUs inched up to 1.449 percent from 1.443 percent.

One-year treasury bills fetched an annual rate of 1.636 percent, up from 1.628 percent previously.

“We saw strong demand in today’s T-bill offering following a reduced volume for December auctions. Rates hardly moved even after the start of the Fed’s [US Federal Reserve] taper and expectations of rates heading north,” De Leon said.

The Treasury had slashed its domestic borrowings program for December to just P70 billion to keep debt-to-GDP ratio within target—59.1 percent—at the end of 2021.

As debt accumulation outpaced economic growth, debt-to-GDP—which reflected capability to repay obligations—jumped to a 16-year high of 63.1 percent as of end-September, above the 60-percent threshold deemed by credit rating agencies as manageable among emerging markets like the Philippines.

TSB