PHL raises $1.6B via retail dollar bonds

THE GOVERNMENT raised $1.593 billion (P80.91 billion) from its first-ever onshore retail dollar bond (RDB) sale last week, as it sought to support the widening budget deficit, the Bureau of the Treasury (BTr) said.

Finance Secretary Carlos G. Dominguez III told reporters over the weekend that the BTr closed its two-week offering of five-year and 10-year RDBs on Friday, awarding nearly four times as much as the initial $400-million target amid strong investor participation via electronic channels.

“Strong outcome could be attributed to platform channels used to disseminate far and wide information on RDB including access with our BTr mobile app and convenient and user-friendly investing apps like Bonds.ph, OF Bank app, First Metro Securities app and BTr ordering platform,” National Treasurer Rosalia V. de Leon said in a Viber message on Sunday.

More than half or $809.2 million worth of RDBs were sold through the digital channels in 520 transactions, according to Mr. Dominguez, which meant there was $1,500 worth of placements per online transaction.

“Of this volume of digital placements, roughly 40% or $329,400 are PesoClear placements. We were also able to reach Filipinos from more than 30 countries for the RDBs, including the Cayman Islands, Papua New Guinea, and Cyprus to name some,” the Finance chief said, citing a report from the Treasury.

Ms. De Leon said the higher-than-market rates offered by RDBs also helped attract small investors, lifting the overall amount raised during its maiden sale. No other details were available.

Proceeds of the fundraising activity will be used to fund the government’s recovery and resilience programs, as well as big-ticket infrastructure projects.

During the price-setting auction on Sept. 15, the Treasury raised an initial $866.2 million, broken down into $551.8 million in five-year RDBs and $314.4 million via the 10-year dollar-denominated notes.

The five-year bonds, which will mature in October 2026, had a coupon rate of 1.375%, while the 10-year bonds due in October 2031 fetched a 2.25% coupon.

The offer ran from Sept. 15 to Oct. 1. The RDBs were sold at a minimum investment of $300 (P15,000), with increments of $100 thereafter.

The bonds will be settled on Oct. 8 and will be listed and traded on the Philippine Dealing and Exchange Corp.

The state-run Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines served as the joint lead issue managers for the issuance, along with BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp., RCBC Capital Corp., SB Capital Investment Corp., Standard Chartered Bank and UnionBank of the Philippines.

The last time the BTr offered onshore dollar-denominated bonds was in December 2012, when it offered the papers to institutional investors only, raising $500 million in 10.5-year bonds from $1.7 billion in total bids.

The government aims to raise P3 trillion this year from local and foreign sources to plug its budget deficit seen to hit 9.3% of overall economic output. — Beatrice M. Laforga