The government on Monday started selling retail Treasury bonds (RTB) anew to try to raise at least P255 billion.
The fund-raising exercise followed weeks of drumbeating for the government security at a time when even a retail investor with disposable income as small as P5,000 is encouraged to participate.
Treasury officials said the decision to tap the retail T-bond market again was precipitated by small investor interest at each stop of the road show, when public demand for the government security was strongest.
The RTBs that started selling on Monday was the 20th tranche for the security and the second such sale under President Duterte.
“We are delighted that the general investing public continued to show strong support for RTBs. The overwhelmingly positive response from the public shows that an increasing number of Filipinos are saving and investing, as well as considering the long-term benefits of investments for themselves and their loved ones,” National Treasurer Rosalia V. de Leon said.
The financial instrument was met with strong public demand that led the BTr to award P130 billion at the initial T-bond sale in November and another sale that generated P125.4 billion during the November 20 to 27 offer period.
Bids for the RTBs were oversubscribed multiple times, with the BTr setting the initial offer at P30 billion.
Moreover, the BTr also harnessed the added liquidity in the market ahead of the Christmas season, with the RTBs positioned as viable gifts leading to financial stability.
Such a sale also helps the monetary authorities cap liquidity expansion in the financial system that would otherwise only serve to boost inflation.
“The benefits of RTBs are multifold. These instruments help achieve financial stability for individuals and families, and, at the same time, these allow ordinary Filipinos to profoundly contribute to nation-building,” she added.
The Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LandBank) were the joint lead issue managers for the 20th RTB offering and were joined by BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp. and SB Capital Investment Corp. as joint issue managers.
Last month the BTr received bids amounting to as high as P191.808 billion for the second sale of RTBs for this year, which prompted the auction committee to sell a total of P130 billion.
Relatively high liquidity in the market allowed the Treasury to sell P130 billion so soon after an initial offer of P30 billion. The five-year security sold for 4.530 percent and a coupon rate issue of 4.625 percent.
Earlier in the year, the government offered to sell only P30 billion worth of RTBs but ended up selling a total P181 billion in three-year RTBs. The sale was 16 times oversubscribed with total tenders reaching P500 billion.
RTBs earn a fixed interest rate based on prevailing market rates, with interest coupons paid quarterly.
According to the BTr, offering RTBs to the general investing public is one of the ways for the government to develop the local capital market by expanding the investor base of government securities.