Govt raises P463B from RTB issuance

The government has generated P463.3 billion from its latest retail treasury bond (RTB) offering, a portion of which would be used to finance its efforts to help the economy recover from the coronavirus crisis, the Bureau of the Treasury (BTr) reported on Thursday.
The amount was more than 15 times the P30-billion issue size the Treasury bureau announced last month.

National Treasurer Rosalia de Leon told reporters that the total figure was composed of P411.8 billion in new money and P51.5 billion raised through switch offers.

The latest offer, the 25th of its kind made by the BTr, “demonstrates [the] increasing awareness of retail investors [of] government securities, not only as [a] safe and convenient investment, particularly with easy access [to] mobile applications, [but also as a] way of contributing to a strong and inclusive economic rebound,” de Leon said.

The three-year bonds were priced at a coupon of 2.375 percent. Small investors were allowed to buy these in minimum denominations of P5,000.

To ensure the wider participation of individual investors, the bonds were offered through online channels, which include the RTB Online Ordering Facility. These were settled through the electronic-payment facilities of China Banking Corp., Development Bank of the Philippines, First Metro Securities and Brokerage Corp., and Land Bank of the Philippines.

These were also offered on the Bonds.PH mobile application of the Union Bank of the Philippines and OFB Mobile Banking Application of the Overseas Filipino Bank.

A total of P55.6 million was secured from online and mobile channels, according to the BTr.

RTBs are generally considered low-risk for investors, allowing them to earn a fixed interest based on prevailing market rates, and are paid quarterly over the term of the bonds.
The Treasury said these bonds promoted financial literacy and inclusion by making safe investments accessible to Filipinos the world over.

“As we endeavor to win back our growth momentum from the clutches of the [coronavirus] pandemic, we turn to retail treasury bonds as our curtain-raiser in what is shaping to be another busy year for fundraising,” de Leon said.

Proceeds from the offer would partially fund the 2021 national budget and support programs for economic recovery and strengthening the country’s health-care system, according to the bureau.

De Leon has said the offering was part of the government’s P3-trillion borrowing program this year, “about 82 percent of which will be sourced from the domestic market.”

“Though the enormity of this amount may appear staggering, we have already proven last year that it could be accomplished, thanks in large to the overwhelming support given to our RTB issuances,” she added.

The offer was the eighth made during the Duterte administration, after those in September 2016, April and November 2017, May 2018, February 2019, and January and July 2020.