RTBs remain as popular as when first sold

The 19th edition of the retail Treasury bond (RTB) sale of the Bureau of the Treasury (BTr) remained as popular as the day it was first sold by then-Treasury chief and now Education Secretary Leonor M. Briones, the IOUs having attracted offers more than twice the planned amount totaling P70 billion on Tuesday.

National Treasurer Rosalia V. de Leon anticipated attracting up to maybe P30 billion worth of RTBs, but ended selling the entire batch instead.

According to de Leon, the auction committee decided to award P70 billion on the basis of strong appetite from investor with aggregate tenders amounting to P86.172 billion.

The bidding committee had to reject P16.172 billion as a result.

The anticipated interest-rate hike seen pursued by the US Federal Open Market Committee (FOMC) over the near term, as well as consequential adjustments by the Bangko Sentral ng Pilipinas (BSP) were factors also seen to have been taken into account by the market.

“This is really just going by the market, and expectations on eventual and succeeding rate hikes, not just one but talks of two, already from the Fed. And maybe they are already pricing in the eventuality the BSP will follow after holding the policy rates steady during the last Monetary Board meeting,” de Leon told financial reporters.

The 19th edition pertains to three-year RTBs with a coupon rate of 4.250 percent set at the auction on Tuesday.

This represents an improvement over the same IOUs issued earlier with a coupon averaging 3.873 percent. These mature on April 11, 2020.

“For the government, [this] has evolved as a staple platform in the government’s financing program, allowing us to achieve twin objectives of inward bias to take advantage of ample domestic liquidity and reduce foreign-exchange exposure. At the same time, help inculcate good
money habits by providing access to an affordable and secure instrument that yields favorable returns to help achieve one’s goals,” de Leon added.

To promote the offering, the BTr will hold a series of road shows in key cities throughout the Philippines: March 28, DBP Bulwagan, Makati City; March 29, Mount Malarayat Golf and Country Club, Lipa City; March 29, Marco Polo Hotel, Davao City; March 30, Baguio Country Club, Baguio City; March 30, Radisson Blu Hotel, Cebu City; March 31, Quest Hotel, Clark Freeport Zone, Pampanga; March 31, Seda Atria Hotel, Iloilo City; April 3, Mallberry Suites Business Hotel, Cagayan de Oro City; April 3, The Oriental Legazpi, Legazpi City.

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

 

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