NextGen Day

MANILA, Philippines — During the rate-setting auction on Tuesday, the Bureau of the Treasury (BTr) awarded PHP120.764 billion in five-year retail treasury bonds (RTBs).

The debt instruments were auctioned for PHP30 billion, and bids totaled PHP183.44 billion.

The debt paper’s coupon rate, which will be released on March 4, 2022, is 4.875 percent.

The deal will run from February 15 to February 28, but it will rely on whether “the subscription has reached a level deemed sufficient by the BTr,” according to the BTr.

“There was a lot of interest in RTB at the auction. After the sale, National Treasurer Rosalia de Leon sent a Viber message to journalists, saying, “Coupon penciled in rate liftoff and developing greater inflation risk.”

The rate hikes and higher inflation variables, she noted, are due to events in the United States, not the Philippines.

De Leon said 75 percent of the government’s PHP2.2 trillion borrowing program for this year will be sourced from the domestic market during her remarks at the debut of the RTB’s 27th tranche, which was streamed live on the BTr’s Facebook page.

“By maintaining a bias toward domestic sources of funding, we will not only protect the government from foreign exchange risks, but we will also be able to take advantage of the BSP’s (Bangko Sentral ng Pilipinas) support to maintain an accommodative monetary stance while also funding the government’s recovery, resilience, and emergency programs,” she said.

The money raised will also go toward the government’s vast infrastructure initiative, which is “aimed at optimizing economic efficiency and contributing to attaining GDP (gross domestic product) growth of 7 to 9%,” according to De Leon.

Because the minimum investment is PHP5,000, RTBs are debt instruments aimed at small investors.

Since the epidemic began in 2020, BTr has expanded investors’ options for government-issued paper investments.

Aside from the lead issue managers, which this year include BDO Capital & Investment Corporation, BPI Capital, Chinabank Capital Corporation, First Metro Securities Brokerage Corporation, and Union Bank of the Philippines (Unionbank), BTr is also offering the debt paper through its website, www.treasury.go.ph (OFBank).

BTr is running exchange offers for holders of bonds expiring on March 14, 2022 (FXTN 20-02) and July 4, 2022 (BTr 20-02) at the same time as the RTB offer (FXTN 03-24).

RTB issuance, according to De Leon, has “truly become a significant feature of BTr’s savings mobilization program, not only because it makes investing in government securities easy for investors, but also because it allows Filipinos all over the world to contribute to the funding of the national government’s key programs.”

BTr was able to generate around PHP832.3 billion from two RTR issuances in 2021, according to her.

“The retail treasury bond currently accounts for more than 30% of our outstanding government securities,” she continued, citing its growing popularity and success over the years.

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