Gov’t considering issuance of $2B-$3B in RTBs

MANILA, Philippines  -The national government is finalizing plans to offer $2 billion to $3 billion worth of retail Treasury bonds (RTBs) denominated in American dollars, which might be announced in Washington DC next month in April, according to Finance Secretary Benjamin Diokno.

Diokno told reporters the possible issuance was aimed at Filipinos who are based overseas as well as those who are here in the country, since the debt paper could be made available in Philippine pesos.

“It would be a good investment option, for as little as $200,” the finance chief said. “Proceeds [from the exercise] will be used for budget financing [or to support the national government’s expenditure program].”

Diokno said the idea of a dollar retail T-bond issuance was first broached earlier this year during sorties of the Marcos administration’s economic managers in the United Kingdom and Germany.

“Thus, we are also considering [an RTB issuance denominated] in euros,” he added.

In February, the Bureau of the Treasury raised P283.71 billion from the 29th tranche of peso RTBs.

In January, the national government raised from the latest issuance of global bonds $3 billion or half more than the $2-billion target amount.

This comprised $500 million in 5.5-year bonds, $1.25 billion in 10-year bonds and $1.25 billion in 25-year bonds.

This latest outing in the global commercial bonds market helped bring the Philippines’ balance of payments (BOP) position to a surplus of $2.2 billion, covering January and February.

The two-month BOP surplus was a turnaround from a deficit of $259 million for the same period last year.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said that in the coming months, the BOP could see support from the continued growth in the country’s structural US dollar inflows such as remittances, revenues from business process outsourcing operations, exports, foreign investments and foreign tourism receipts.

“The proposed $3-billion US dollar or euro-denominated retail bonds to be offered by the national government in the second quarter 2023 would also be added to the country’s BOP and GIR (gross international reserves) by then,” Ricafort said.

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