Gov’t raises P236 billion from retail Treasury bonds

Font Size

By Melissa Luz T. Lopez, Senior Reporter

THE government has raised P235.935 billion from its latest offering of retail Treasury bonds (RTBs), National Treasurer Rosalia V. De Leon said on Friday.

In a text message, Ms. De Leon said the Bureau of the Treasury awarded this amount for the five-year papers following a two-week offer period. She added that tenders received for the RTBs were “much higher,” but declined to give the exact figure.

The retail bonds are meant to attract both institutional and individual investors, with a yearly interest rate of 6.25% which is higher than rates at the secondary market and from the yield fetched in previous offerings.

Strong demand seen during the Feb. 26 pricing exercise prompted the Treasury to upsize its offer fourfold to P120 billion from P30 billion initially, with bids expected to reach P200 billion.

The RTBs were offered to the general public through 21 authorized selling agents at denominations of P5,000 until today.

The papers must be settled on March 12, and will mature by 2024.

The Treasury is looking to borrow P360 billion during the first three months of this year through a mix of short and long-term papers, which will support the funding requirements of the national government.

Strong market appetite for RTBs allowed the state to opt for a partial award during Monday’s offering of Treasury bills. Ms. De Leon has said that there was no reason for them to accept higher interest rates given that the inflation trend is declining, together with a big amount raised via the retail papers.

Inflation clocked in at 3.8% in February, settling lower than market expectations and marking the lowest rate tallied in a year. This is also the first time since February 2018 when the monthly rate fell within the 2-4% target range set by the central bank.

The additional funding is meant to support the ambitious spending plans of the Duterte administration, largely for its “Build, Build, Build” infrastructure push.