BTr raises P121B from RTB auction
By Jenina P. Ibañez, Senior Reporter
THE PHILIPPINE government on Tuesday raised an initial P120.764 billion in an auction of five-year retail Treasury bonds (RTBs) as it continues to seek funding for its pandemic recovery efforts.
Tenders at the rate-setting auction reached P183.44 billion, or more than six times the P30 billion on offer at the Treasury’s first retail bond offer for 2022.
The retail Treasury bonds fetched a coupon rate of 4.875%, higher than the 4.625% set for the five-and-a-half year RTBs in November last year.
The RTBs’ coupon rate is also higher than the five-year debt papers quoted at 4.4732% in the secondary market, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.
National Treasurer Rosalia V. de Leon said the auction showed strong interest in RTBs.
“Coupon penciled in rate liftoff and emerging higher inflation risk (in the United States),” she said via Viber.
US Federal Reserve officials have been providing forward guidance about a possible rate hike by March, and quicker inflation bolsters the case for a more aggressive policy tightening.
The US consumer price index increased by 7.5% year on year in January, the quickest in four decades. It was faster than the 7.3% median estimate in a Reuters poll and the 7% in December.
The RTBs target small investors who want low-risk, higher-yielding savings instruments backed by the National Government.
“Characteristic of an RTB offering, the auction was well-received by investors as evidenced on the total bids submitted by the market,” a trader said in a Viber message.
“Having this issuance has reciprocal benefits for both the issuer and the investor as the market is still awash with liquidity that is in need of further cash outlets for diversification. The coupon rate set by the BTr (Bureau of the Treasury) was well-within market expectations.”
The five-year bonds are being sold in denominations of at least P5,000, and in multiples of P5,000 thereafter.
The BTr also said holders of fixed-rate Treasury notes maturing on March 14 and July 4 can swap their holdings for the RTBs. The minimum exchange offer is P5,000.
The offer period for the peso-denominated debt is from Feb. 15 to 28, while settlement is on March 4.
The RTBs’ maturity date is on March 4, 2027.
In November 2021, the government raised P360 billion from its offering of five-and-a-half year RTBs. Of the total amount, P330.5 billion raised was fresh funds, while the remaining P29.5 billion was from the bond exchange program.
It was Treasury’s second RTB offering of 2021 after it raised P463.3 billion from three-year retail papers in February.
Issue managers for the latest RTBs include the Land Bank of the Philippines (LANDBANK), Development Bank of the Philippines (DBP), BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp. (FMIC), SB Capital Investment Corp., and UnionBank of the Philippines, Inc. (UnionBank).
Authorized selling agents for the bonds are Asia United Bank, BDO Unibank, Inc., BDO Capital, BPI Capital, China Banking Corp., Citibank N.A., DBP, East West Banking Corp., FMIC, ING Bank, LANDBANK, Metropolitan Bank & Trust Co., Philippine Bank of Communications, Philippine National Bank, Rizal Commercial Banking Corp., Robinsons Bank Corp., Security Bank Corp., Standard Chartered Bank, and UnionBank.
