National Treasurer Roberto Tan (INQUIRER FILE PHOTO/ GRIG MONTEGRANDE)
MANILA — The Bureau of the Treasury accepted on Tuesday, P60 billion in bids to kick off the first issuance of retail treasury bonds (RTBs) under the Duterte administration, selling at an annual rate of 3.466 percent.
“We had a very good turnout of our auction to price the RTBs,” National Treasurer Roberto B. Tan told reporters. The Treasury received a total of over P123.7 billion in tenders for the 10-year debt paper with the coupon rate set at 3.5 percent.
The Treasury had announced to sell at least P30 billion in bonds maturing in 2026. The public offer period will be until Sept. 16. Issuance will be on Sept. 20.
“We are very glad to see the turnout of the auction, [which was] more than four times oversubscribed. [We had a] very reasonable rate which would be attractive for investors and also advantageous for the borrowers,” Tan added.
To better promote the debt offering aimed at small investors, the Treasury will embark on roadshows to promote the RTBs in the cities of Davao, Cebu, Cagayan de Oro, Iloilo, Naga, Batangas, Baguio, Makati and Manila, according to Tan.
The proceeds of the 18th RTB tranche of the Philippine government would be used as “buffer” to finance projects to be rolled out for the rest of the year, Tan said.
“As you know, we are ramping up our infrastructure expenditures as well as the provision of social services for human capital development,” he said.
The fixed rate bonds will be sold until Sept. 16 by 15 selling agents: Banco de Oro Universal Bank, China Banking Corp., Citibank N.A., Development Bank of the Philippines, East West Banking Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine Bank of Communications, Rizal Commercial Banking Corp., Security Bank Corp., ING Bank, BPI Capital Corp., First Metro Investment Corp., Robinson Bank Corp., and BDO Capital and Investment Corp.
The RTBs will be sold to individuals, corporations (except state-run firms), financial institutions as well as institutional investors, according to Deputy Treasurer Erwin D. Sta. Ana during an investors’ briefing.
In a statement last week, Tan said the peso-denominated RTB “aims to reach a wider retail investor base” as “the government wants the ordinary retail investor to have easier access to safe government debt securities.”
Also, “as the maiden issuance of the Duterte administration, this fundraising exercise seeks to augment the funds available for the President’s 10-point socioeconomic agenda, with particular emphasis on infrastructure projects,” Tan had said. Duterte’s economic managers want to jack up infrastructure spending as a share of the gross domestic product to 7 percent by 2022.
Interest payments will be quarterly.
The RTBs will be issued in scripless form, according to the Treasury, adding that these will be sold in minimum denominations of P5,000 during the public offer period.
“The RTB issuance is part of the government’s initiative of making government securities available to retail investors and promoting investment-consciousness among Filipinos. The RTBs represent the Philippine government’s direct, unconditional, and general obligations and as such, are considered low-risk for local investors. The RTBs will be distributed through qualified dealers and selling agents which are required to sell at least half of their allocated volumes to retail investors,” according to the Treasury.
The government was bullish about the upcoming RTB issuance as the Treasury had noted that “amid market volatilities stirred by global uncertainties, demand for Philippine government securities is expected to remain strong in light of the country’s sound economic fundamentals, strong domestic liquidity, and recent positive economic growth.”
For this RTB transaction, the Treasury tapped BDO Capital and Investment Corp., BPI Capital Corp., Chinabank Capital and DBP as issue managers, while FMIC and Landbank were the designated lead issue managers.
The Philippine government last issued RTBs in 2013, during which P150 billion were raised at 3.25 percent.
The RTBs maturing on 2023 were oversubscribed by 906 percent, such that the Treasury sold five times the minimum offering of P30 billion. SFM