February 25, 2018, 6:10 am
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Treasury to sell P30B retail bonds next week

The Bureau of the Treasury (BTr) will offer five-year retail treasury bonds (RTBs) next week, as the government seeks to take advantage of the strong demand for the retail securities, as seen during its previous sale.

The second RTB offering for this year will have a minimum issue size of P30 billion.

“We have to align with the market but at the same time also, we see that there is a lot of liquidity. During the April issuance, we’ve seen that there is a very strong unmet demand. So we still see that there is still a lot of appetite among the retail sector and that is also... a very strong, very huge source of funding for the government. So we are doing this comeback of the RTBs,” said Rosalia de Leon, national treasurer.

“We are always on the lookout for opportunities that would allow us to fund the Philippine government’s financing requirements, taking into consideration emerging conditions in the market. RTBs have been a staple platform in the government’s financing program. In the past, we have been able to take advantage of ample domestic liquidity and reduce foreign exchange exposure,” she added.

Earlier this year, the BTr issued P181 billion worth of RTBs. This particular offering was more than 16 times oversubscribed, attracting total tenders of P500 billion, with the final award reaching six times the initial issue size of P30 billion.

“We recognized the significant contributions of RTBs. At the macro level, these have helped in funding the Philippines’ infrastructure requirements. At the individual level, we have seen that retail treasury bonds have been effective in introducing many Filipino families to the concept of investing,” De Leon said.

De Leon said  the low-risk nature of, and relative ease of,  investing in RTBs have made them an attractive investment product for Filipinos. RTBs have been utilized to augment funding for the administration’s 10-point socioeconomic agenda.

“We continue to keep tabs on the market. We know that domestic liquidity has been sustained, and when the timing is right, we will once again make retail treasury bonds available to the general investing public,” De Leon  said.

The RTB auction will be held on November 20, with the public offer valid until the 29th. The issue date is on Dec. 4, 2017.

The BTR has tapped the Development Bank of the Philippines and the Land Bank of the Philippines as joint lead issue managers, and BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., and SB Capital Corp. as joint issue managers for the RTB offering.

Meanwhile, the auction of treasury bills yesterday ended with mixed results as the BTr made a full-award for the 89-day and 180-day treasury bills while it opted for a partial award for the full-year paper.

“We opted for the partial award since the rate was too high. We have already seen during the previous weeks already the market is already inputing the 97 percent possibility of the Fed rate hike for next year,” de Leon said.

The 89-day paper fetched a rate of 2.148 percent, 19.1 basis points (bps) higher than the previous average of 1.957 percent.

Tenders totaled to P12.925 billion with the government selling P8 billion as programmed.

The 180-day IOUs fetched a rate of 2.563 percent, 10.6 bps up from the 2.457 percent previous yield.

The BTr sold P6 billion as planned, with tenders amounting to P10.868 biillion.

Lastly, the rate of the 362-day securities was recorded at 2.952 percent, 9.9 bps increase from the previous average of 2.853 percent.

Tenders totaled to P6.148 billion, with the government only selling P4.498 billion of the P6 billion offer.
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