Metro Manila (CNN Philippines, January 29) — The Bureau of the Treasury has raised ₱134 billion in fresh funding through retail bonds auctioned on Tuesday.
The government said it raised more than four times the initial ₱30-billion offer of retail Treasury bonds or RTBs.
Demand was strong for the papers, with the state receiving offers as much as ₱149.8 billion. The Treasury rejected some ₱16 billion worth of bids during the pricing exercise.
“Proceeds from the issuance of RTBs will be used for general budgetary purposes including critical infrastructure projects and social services,” the Treasury said in a statement.
RTBs are peso debt papers meant for individual investors. An investor needs a minimum placement of ₱5,000 to secure bonds, which will be repaid with interest.
The three-year bonds will earn 4.375 percent interest yearly, and are due in February 2023. The rate fetched is higher than the 4.274 percent prevailing yield quoted in the local bond market that day, making it attractive for investors.
The debt papers will be auctioned until February 6, and may be bought by individual investors through Land Bank of the Philippines, the Development Bank of the Philippines, BDO Capital & Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, First Metro Securities and Brokerage Corporation, PNB Capital and Investment Corporation, RCBC Capital Corporation, and SB Capital Investment Corporation. A buyer needs to have a peso deposit account in the bank where the RTBs are purchased.
The offer period may be cut short should the government decide that it has raised enough money. The bonds must be settled by February 11.
The Treasury raised ₱236 billion when it sold five-year RTBs in March 2019, nearly eight times the original ₱30-billion offer. RTBs are considered low-risk investments because these are issued by the national government.
Just last week, the government raised 1.2 billion euros (about ₱68 billion) through euro-denominated bonds offered to foreign investors, fetching record-low interest rates in its first foray to the global financial markets this year.
The fund raising forms part of the national government’s financing plans for 2020. This year, it plans to borrow ₱1.4 trillion, with 75 percent of the amount to be raised locally.
