SMALL lenders may have to hold on to their cash as the Bureau of the Treasury (BTr) cancelled the planned launch this month of the first-ever Retail Dollar Bonds (RDBs) following the re-imposition of stricter lockdown in the National Capital Region and several areas in the country.
While National Treasurer Rosalia V. De Leon told reporters last Monday the RDBs would still be auctioned off this year; but she cannot tell
exactly when.
De Leon said they “will adjust” the launch because of the enhanced community quarantine that began August 6 and they will continue to “monitor market developments.”
“Not postpone since we have not officially set launch date. Of course, plan is to do it this year,” the Treasurer said in a message to reporters.
De Leon earlier said August is the month for they plann to hold the auction for the maiden offering of RDBs.
Support
IN a separate statement, the Treasury said several banks have already expressed support for the issuance of RDBs and agreed to set the minimum initial deposit and average daily maintaining balance requirement to zero for those who would want to purchase the US-dollar denominated securities. This means that banks would do away with their current practice of requiring depositors to open dollar accounts with a minimum balance of $500 to $1,000 before being able to invest in the RDBs.
The Treasury said the issuance of the RDBs—the first onshore US-dollar denominated bonds to be issued in amounts as low as $300—is expected to help the government raise funds for the Philippine government’s Covid-19 recovery and resilience programs.
The potential RDB offering is also seen to be far more accessible than the traditional US dollar-denominated global bonds issued by the Philippine government which require a minimum subscription of $200,000.
Aside from offering the RDBs at a small minimum investment amount, De Leon said the bonds will be available through the BTr’s online ordering facility, Bonds.PH mobile app and the Overseas Filipino Bank mobile application.
T-Bills
MEANWHILE, the BTr fully awarded on Monday about P15 billion in Treasury Bills (T-bills) as rates across all tenors moved sideways.
In a message to BusinessMirror, De Leon attributed the mixed results to the easing of the country’s inflation rate to 4 percent in July as well as Bangko Sentral ng Pilipinas’ (BSP) statement that a reserve requirement ratio (RRR) cut is on the table.
However, BSP Governor Benjamin E. Diokno said in a televised interview that it is “untimely” to reduce the RRR now and raise interest rates. The BSP is set to hold its next policy meeting on Thursday.
The auction was more than thrice oversubscribed, with total bids reaching P54.9 billion.
Rates
THE 91-day T-bills fetched an average of 1.064 percent, up by 1.1 basis points from 1.053 percent previously. Total bids for the tenor amounted to P17.2 billion, more than three times the P5-billion offering.
For the 182-day T-bills, its average rate stood at 1.407 percent, inching up by 0.6 basis points from 1.401 percent. Tenders for the debt paper also hit P17.2 billion, thrice the P5-billion offering.
In terms of the 364-day T-bills, it posted an average rate of 1.625 percent, slipping by 0.7 basis points from 1.632 percent. The tenor attracted P20.4 billion in total bids, four times the P5-billion offering.
For August, the Treasury has set to borrow P200 billion from the local debt market, slightly lower than the P235 billion it programmed in July.