P162.7B raised from sale of 5.5-year retail bonds

The Bureau of the Treasury (BTr) on Tuesday raised an initial P162.7 billion from the sale of  5.5-year retail treasury bonds (RTBs), the Marcos administration’s first foray into borrowing from small creditors like individuals and cooperatives.

During the rate-setting auction, the BTr awarded the RTBs at a coupon rate of 5.75 percent a year.

While RTBs are borrowings, they are pitched by the government as an investment option, which Finance Secretary Benjamin Diokno described during the launch as “safe, low-risk, and affordable instruments that allow Filipinos to contribute to nation-building while growing their hard-earned savings with better returns.”

The coupon was higher than prevailing secondary market rates of 5.434 percent for outstanding five-year bonds, and 5.64 percent in the case of six-year debt paper.

Government securities eligible dealers (GSEDs) offered to lend the BTr a total of P225.3 billion, much bigger than the initial P30-billion offering.

National Treasurer Rosalia de Leon did not say how much funds the BTr wanted to raise from its latest RTB offer, even as she said the auction results “already showed strong interest.”

De Leon said proceeds from these local borrowings will finance the programs and projects under the Marcos administration’s eight-point economic agenda, including infrastructure development and jobs creation.

The government’s 28th and the Marcos administration’s first RTB offering will be until Sept. 2.

Last March, the Duterte administration’s 10th and last RTB issuance raised a total of P457.8 billion from five-year IOUs, which fetched a 4.875-percent coupon.

Retail investors can snap-up RTBs at a minimum of P5,000 per bond, and then in multiples of that amount.

They can buy RTBs from agent-banks over-the-counter, through the BTr’s online ordering facility, as well as through mobile apps of participating banks such as Bonds.PH, iAccess of state-run Land Bank of the Philippines (Landbank), and Overseas Filipino Bank’s (OFBank) app in the case of Filipinos working or living abroad. Four bond series maturing late this year and early next year can also be exchanged for the new RTBs.

Diokno said that since the first RTB offering in 2001, the government raised a cumulative P4.37 trillion from RTBs, which now accounted for about 35 percent of the BTr’s outstanding government securities.

This year, the national government will borrow P2.2 trillion, of which P1.65 trillion or three-fourths of total would be sourced from the domestic debt market “to insulate the country from foreign exchange volatilities resulting from ongoing global uncertainties,” Diokno said.

Local fund-raising during the first half so far resulted in P741-billion borrowings, the Finance chief said.y

“In the last two decades, RTBs have proven to be the strongest performing financial instrument in the BTr’s portfolio of bond offerings… Our growing retail sector is proof that RTBs are a viable pillar of domestic financing,” he said.

“The use of digital platforms is key to bolstering investor appreciation for our government securities among Filipino investors here and abroad. The BTr has been at the forefront of wielding digital tools in its efforts to broaden access to our securities market… Through these innovations, overseas Filipinos from over 41 countries contributed to the success of the last RTB tranche,” he added.