Fresh retail T-bond offer coming to market

MANILA, Philippines  —The Marcos administration plans to sell Treasury bonds to retail investors again in the first quarter to provide budgetary support and help repay old debt.

The upcoming retail T-bond (RTB) sale is part of the government’s broader plan to borrow a total of P2.46 trillion from creditors at home and abroad this year, Finance Secretary Ralph Recto said in a statement on Friday.

READ: PH plans to borrow P2.46T in 2024

The Bureau of the Treasury (BTr) did not reply to questions about the size and tenor of the new RTB offering.

Recto said the issuance would encourage ordinary Filipinos to start investing in safe and stable sources of passive income.

RTBs have become one of the government’s go-to sources of local borrowings to help plug its budget hole, which is projected to hit P1.4 trillion this year.

The proceeds are seen to help raise the cash needed to retire old debt. Based on Bloomberg’s estimate, P700 billion local borrowings will mature in early March.

READ: First retail treasury bond under Marcos raises P420.4B

RTBs have gained popularity among Filipinos looking for affordable investment. In 2023, the government sold P283.71 billion worth of RTBs through traditional bank branches and digital channels.

“The BTr is looking to engage more digital finance platforms, allowing the BTr to reach a wider investor base,” the finance chief said.

Recto said the government would remain “prudent” in its debt management by continuing to adopt a 75:25 borrowing mix in favor of domestic sources.

That means the P2.46-trillion borrowing program this year will be composed of local borrowings worth P1.85 trillion and foreign financing amounting to P606.85 billion.

Such a strategy, he explained, would “mitigate foreign exchange risks, take advantage of the abundant liquidity in the country’s financial system, and support the development of the local debt and capital markets.”

To diversify the state’s funding sources, Recto said the BTr is looking at various global bond markets, with a “potential curtain-raiser offering” in the first semester of the year.

READ: Philippines launches $3-B new overseas bond offer

Before turning over the finance portfolio to Recto and returning to the central bank as a member of the Monetary Board, Benjamin Diokno said the government was planning to raise about $5 billion (around P277 billion) from the issuance of foreign bonds this year.

In its efforts to further develop the country’s local debt and capital markets, Recto said the BTr would spearhead several capital market development initiatives such as improving the government securities repurchase program and inclusion in an emerging market bond index. —Ian Nicolas P. Cigaral