Government bags ₧162.72B from sale of RTBs

THE government raised an initial P162.72 billion in its latest offering of 5.5-year Retail Treasury Bonds (RTB), the first one for the administration of President Ferdinand R. Marcos Jr.

The latest RTB offering fetched a coupon rate of 5.75 percent during the rate-setting auction, higher than the benchmark secondary market rates for the 5-year and 6-year tenors at 5.434 percent and 5.640 percent, respectively.

Total bids for the RTBs reached P225.32 billion, making the auction more than seven-times oversubscribed.

Due to the overwhelming demand for the RTBs, the Treasury decided to upsize the offering from the initial P30 billion.

National Treasurer Rosalia V. De Leon expressed optimism that investors would strongly support the Marcos administration’s first RTB offering.

“Auction results already showed strong interest,” De Leon told reporterse.

De Leon said during the launch of the government’s 28th RTB offering that the proceeds from the issuance will be used to support the new administration’s 8-point socioeconomic agenda. These include initiatives on improving the health care system, ensuring food and energy security, expanding infrastructure, promoting investments to provide better and greener jobs and establishing livable and sustainable communities.

Finance Secretary Benjamin E. Diokno said in his keynote speech during the event that the issuance serves as an important component of the government’s fundraising efforts for its development programs aimed at building a sustainable, inclusive and broad-based economy.

Diokno said the government has so far raised over P4.37 trillion since the first issuance of RTBs in 2001.

“Our growing retail sector is proof that the retail treasury bonds are a viable pillar of domestic financing,” he said. “With their consistently strong reception from both local and overseas investors, the retail treasury bonds now account for around 35 percent of the Bureau of the Treasury’s outstanding government securities.”

This year, the government is set to borrow a total of P2.21 trillion, 75 percent of which will come from domestic sources while the remaining 25 percent will be generated from foreign lenders.

In March this year, the Treasury sold P457.8 billion from its sale of 5-year RTBs.

Generally considered low-risk investment instruments, RTBs allow investors to earn interest based on prevailing market rates. Investors are paid quarterly during the term of the bond.

With a minimum investment amount of P5,000, retail investors can participate in the latest offering. The bond is set to mature on March 7, 2028.

Eligible investors for the RTBs may include individuals, cooperatives, retirement funds and provident funds. Holders of maturing debt papers (FXTN 10-57, RTB 5-11, FXTN 10-58 and RTB 3-10) may also swap these with the latest RTBs.

The public offer period for the RTBs that started last Tuesday would end on September 2; the issue date or settlement date is set on September 7.

Interested retail investors may purchase the RTBs via over-the-counter or traditional channels through the branches of the selling agents, via online channels through the RTB ordering facility, which can be accessed through the Treasury website or through the mobile applications of Land Bank of the Philippines Inc. and the Overseas Filipino Bank or the Bonds.PH app.

The joint lead issue managers for the latest RTB offering are Development Bank of the Philippines and LandBank. The joint issue managers are: BDO Capital & Investment Corp.; BPI Capital Corp.; China Bank Capital Corp.; First Metro Investment Corp.; PNB Capital Corp.; SB Capital Investment Corp.; and, UnionBank of the Philippines.

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