Bureau of the Treasury to investors: Put your money in safe instruments

MANILA, Philippines - The Bureau of the Treasury (BTr) is urging investors to put their money in safe instruments such as government debt papers amid the uncertain economic environment.

Treasury bills (T-bills) and bonds and retail treasury bills (RTBs) are better alternatives for investors looking for safer havens, Tan said when asked what options the Treasury could offer to Filipinos in the wake of the collapse of some pre-need firms.

Pre-need firms offering educational plans have closed shop, to the detriment of their clients. Three companies under the controversial Legacy group - Legacy Consolidated Plans Inc., Scholarship Plan Philippines Inc. and All Asia Plans Corp.

When asked if the government would again be selling RTBs this year, Tan said this is a possibility but not in the near future.

”We’re not issuing RTBs in the near future,” Tan told reporters.

He said the Treasury is still studying the market to determine the timing of an RTB issuance as well as its size.

Definitely, he said, the issuance of RTBs is one option the government is looking at to provide Filipinos with investment opportunities.

In July last year, the government sold P77 billion worth of three-year and five-year RTBs to small investors and to government-owned and controlled corporations (GOCCs). The Treasury issued three-year and five-year RTBs and has mandated three investment banks as joint managers and coordinators — First Metro Investment Corp., BPI Capital Corp. and the Development Bank of the Philippines. Last year’s offering marked the largest RTB sale for the government in recent years.

The government raised P55 billion worth of the debt paper through the public offering and some P22 billion via an over-the-counter sale to GOCCs.

Originally, the government was eyeing to sell only at least P8 billion worth of the debt paper last year.

Tan said that this week, the government has maturities amounting to P134 billion. Through the issuance of RTBs, the government would be able to get back some funds that would be freed up.

The issuance of RTBs is part of the government’s savings mobilization program designed to make government securities available to retail investors and at the same time create savings consciousness among Filipinos. With RTBs, investors can buy the debt paper for a minimum amount of P5,000.

Last year, the government had at least P33 billion worth of RTBs that matured.

For the first quarter of 2009, the government plans to borrow P92 billion from the local debt market through the issuance of T-bills and T-bonds.

The programmed borrowing for the first quarter of next year is P31 billion more than what the government had programmed to borrow in the fourth quarter of this year which was P61 billion.

According to the BTr’s borrowing program for the first quarter of 2009, the government will issue a total of P42 billion worth of T-bills and P50 billion worth of T-bonds.