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Government to auction P30-billion 3-year RTBs

The government will sell at least P30 billion in three-year retail Treasury bonds (RTBs) to widen participation of local investors in government securities, the Bureau of the Treasury (BTr) announced on Thursday.

According to the 19th RTB notice posted in the BTr web site addressed to government securities eligible dealers (GSEDs), the peso-denominated RTBs will be auctioned off on Tuesday, March 28. The P30-billion RTBs will mature in 2020.

“We want more Filipinos to get into the habit of investing and become more financially aware of how their money could work harder for them,” National Treasurer Rosalia V. de Leon said.

The offer period will end on April 6, while the issue date for the RTBs is on April 11. Filipinos can invest at a minimum denomination of P5,000, according to the BTr.

The BTr said RTBs provide an opportunity for the investing public to access affordable and higher-yielding instruments compared to regular time deposits in banks. The security also form part of the Philippine government’s funding program aimed at promoting financial literacy and inclusion among individual investors.

The RTBs earn a fixed interest rate based on prevailing market rates, with interest coupons paid quarterly.

“The final interest rate will be determined through a Dutch auction to be participated in by GSEDs. The interest rate shall be based on current market levels of comparable securities rounded down to the nearest one-eight of 1 percent,” the RTB offer notice said.

The BTr has tapped First Metro Investment Corp. and Land Bank of the Philippines as joint lead issue managers, and BDO Capital & Investment Corp., BPI Capital Corp., Development Bank of the Philippines, China Bank Capital Corp. and SB Capital Corp. as joint issue managers for the RTB offering.

Last September the 18th RTB auction was issued under then-National Treasurer Roberto B. Tan. It generated P100 billion for the government when it closed on September 16, 2016. The RTBs had a 10-year tenor, with a minimum aggregate principal amount of P30 billion.

The 18th tranche of RTBs was issued on the back of a liquid market still seeking for a number of investment outlets.

 

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