Gov’t to borrow from small creditors starting next week

The Marcos administration will borrow from small creditors, through the sale of Retail Treasury Bonds (RTBs), starting next week to help finance projects aimed at boosting the country’s recovery from the pandemic.

The Bureau of the Treasury (BTr) is expected to initially sell P30 billion worth of the RTBs in an auction on Tuesday, Aug. 23.  This will be held instead of the earlier scheduled treasury bond auction for that day which the BTr has already canceled.

On its social media site, the BTr has advertised the offering of the RTBs for “investments” of at least P5,000 to retail investors.

It will be the first RTB issuance under the Marcos administration but the 28th for the Philippines overall.

National Treasurer Rosalia de Leon neither confirmed nor denied the forthcoming fund-raising through RTBs.

While RTBs are borrowings, the BTr usually pitches it as an investment option for retail investors, given its higher annual yields compared to bank accounts and other investment instruments.

On its Facebook page, the BTr also said RTB bond-holders would help in the recovery of the economy as the money they would lend or invest would be spent on government programs and projects.

According to a Bloomberg report on Thursday, the BTr plans to issue six-year RTBs maturing in 2028, alongside a swap of outstanding bonds set to mature this year and next year.

As in previous RTB offerings, the BTr plans to raise an initial P30 billion during the rate-setting auction, after which it will offer these IOUs for one to two more weeks, depending on demand.

Last March, the Duterte administration’s 10th and last RTB foray raised P457.8 billion from the sale of five-year debt paper, which fetched a coupon rate of 4.875 percent.

The government will borrow a total of P2.2 trillion this year, of which P1.65 trillion would be sourced locally through the issuance of treasury bills and bonds. In the first half, the government already borrowed about P1.07 trillion.

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