Government closes sale of 3, 5-year retail treasury bonds due to strong demand

MANILA, Philippines - The government has closed the sale of three- and five-year retail treasury bonds (RTBs) due to overwhelming demand, National Treasurer Roberto Tan said yesterday.

“We are no longer accepting (subscriptions) for the three and five,” Tan said.

The government is accepting subscriptions for the seven-year RTBs until it raises roughly P90 billion worth of offers for all three tenors, Tan said.

The government started the sale of three-, five- and seven-year RTBs on Tuesday wherein it raised at least P25 billion, almost double the initial offer of P15 billion as total tenders reached P70.38 billion, or almost five times oversubscribed.

It has authorized 13 investment firms and commercial banks as selling agents for the RTBs. Banks authorized to sell RTBs to retail investors are Banco de Oro Universal Bank, China Banking Corp., Development Bank of the Philippines, Deutsche Bank, Land Bank of the Philippines, Philippine National Bank, Rizal Commercial Banking Corp. and the Security Bank & Trust Co.

The authorized investment houses are the Bank of the Philippine Islands (BPI) Capital Corp. Banco de Oro Capital & Investment Corp., First Metro Investment Corp., Multinational Investment Bancorp. and Vicsal Investment Inc.

The three-, five- and seven year retail treasury bonds fetched coupon rates of 5.250 percent, 6.250 percent and seven percent, respectively.

With demand hitting P70.38 billion during the initial offering, analysts believe that the government can easily exceed the P70 billion it raised from last year’s RTB sale.

Analysts said the strong appetite for RTBs indicate that liquidity in the market is very high. Investors have been looking for attractive facilities to park their funds, they said.

The Treasury has set a public offer period from Sept. 15 to 22 for the RTBs. The issue date is on Sept. 24.

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.