THE Bureau of the Treasury (BTr) was able to raise last Tuesday an initial P113.55 billion from its latest offering of 5.5-year Retail Treasury Bonds (RTBs).
The amount was an upsize from the P30-billion offering as the rate-setting auction for the government’s 26th RTB offering was met with robust demand from investors.
The auction ended up more than five-times oversubscribed with total tenders hitting P165.03 billion.
National Treasurer Rosalia V. De Leon attributed strong investor appetite to expectations that rates will go up following the US Federal (Fed) Reserve’s announcement that it would begin tapering its massive bond-buying program.
“RTB attracted strong demand with tucked in premium over secondaries in consideration of larger volume and expectation of rates climbing up as era of loose monetary policies comes to a close starting with Fed taper announcement,” De Leon told reporters after the auction.
The tenor fetched an interest rate of 4.625 percent per annum.
The latest RTB offering, which is set to mature on June 2, 2027, is made available to retail investors in minimum denominations of P5,000.
Apart from aiming to attract new investors, the BTr is allowing previous bondholders to swap their fixed rate treasury notes (FXTN-10-54 and 5-74) with the new bond offering.
The public offer period is set to last until November 26.
De Leon said they do not have a target volume to be raised for this RTB offering. The Treasurer said the proceeds from the issuance of these RTBs will be used for “budget funding.”
Interested investors may purchase RTBs through over-the-counter placements, BTr’s online ordering facility and through mobile applications, such as Bonds.PH or the “Overseas Filipino Mobile Banking” app.
The national government has been issuing RTBs since 2001 as part of its efforts to support financial inclusion and literacy among Filipinos.
Generally considered low-risk investment instruments, RTBs allow investors to earn a fixed interest based on prevailing market rates that are paid quarterly during the term of the bond.
The joint lead issue managers for the 26th RTB offering are Development Bank of the Philippines and LandBank of the Philippines. The joint issue managers are: BDO Capital & Investment Corp.; BPI Capital Corp.; China Bank Capital Corp.; First Metro Investment Corp.; PNB Capital and Investment Corp.; and, UnionBank of the Philippines.