THE GOVERNMENT has raised P360 billion via its offer of five-and-a-half-year retail Treasury bonds (RTBs) that ended on Friday amid strong demand from investors on the hunt for higher returns.

The Bureau of the Treasury (BTr) said in a statement on Monday that P330.5 billion of the total amount raised was fresh fund or “new money,” while the remaining P29.5 billion was from the bond exchange program.

The 26th issuance is the Treasury’s second RTB offering of the year after it raised P463.3 billion from three-year retail papers in February.

“The healthy macroeconomic environment, charactertized by sufficient domestic market liquidity and downward trend in inflation supported our third retail issuance, or the second peso-denominated jumbo offering for the year,” National Treasurer Rosalia V. de Leon said in a statement on Monday.

The bond offer was launched on Nov. 16 and the Treasury raised an initial P113.545 billion from the rate-setting auction.

The RTBs fetched a coupon rate of 4.625%. They will be issued on Dec. 2 and mature by 2027.

A bond trader in a Viber message said demand for the RTB offer was strong as almost the entire investor base — from banks to retail investors — showed significant interest due to the relatively good rate versus papers at the secondary market.

“This offering had a reciprocal benefit for both investors and the National Government as the market is still very much armed with liquidity and still on the hunt for yield. If you ask me, demand has exceeded expectations for this issuance.”

The five-and-a-half-year RTBs were sold in denominations of at least P5,000, and in multiples of P5,000 thereafter.

The BTr also opened a bond exchange offer, where holders of fixed-rate Treasury notes maturing in 2022 can swap their holdings for the new RTBs. The minimum exchange offer was P5,000.

The Treasury offers retail bonds for small investors that want low-risk, higher-yielding savings instruments backed by the National Government. To reach overseas Filipinos, the bureau also worked with the Department of Foreign Affairs to conduct RTB investment webinars.

The BTr said proceeds from the issuance will be used to fund government pandemic-response and economic recovery programs.

“With the digital platforms that we have introduced in the past years, we have also seen how more and more Filipinos are getting into the habit of investing their hard-earned money to secure the future not only of themselves, but also of their loved ones,” Ms. De Leon said.

“We at the BTr will continue to introduce new products and channels in the future to allow our individual investors to diversify their personal portfolios, as well as reduce the friction costs and barriers to investing.”

Issue managers for the RTBs include the Land Bank of the Philippines, Development Bank of the Philippines, BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp., PNB Capital and Investment Corp., and UnionBank of the Philippines, Inc.

Gross borrowings by the National Government reached P2.75 trillion as of end-October as it continued to raise money for its pandemic response.

The government borrows from local and foreign creditors to finance the budget deficit that has widened since last year after the pandemic stalled the economy and pulled down tax collections. — Jenina P. Ibañez