Government borrows P420 billion from small creditors

MANILA, Philippines — The government borrowed a total of P420.45 billion in the first offering of retail Treasury bonds (RTBs) under the Marcos administration in a bid to boost state coffers for various recovery projects.

The Bureau of the Treasury on Friday closed RTB-28, a 5.5-year bond designed for retail investors as a low-risk and higher-yielding savings instrument, after a week of offering.

Since its launch last Aug.23, the Treasury raised a total of P420.448 billon, well above the P30 billion target offer.

Of this, P108.5 billion was from a swap offer for bonds expiring on Sept. 13, Dec. 14, Dec. 6 of this year, and on Feb. 11, 2023.

Coupon rate is at 5.75 percent, higher than the 5.434 percent and 5.64 percent BVAL Reference Rate, which is the standard for securities.

National treasurer Rosalia de Leon maintained that the auction result showed investor confidence on government securities and on the economy as a whole.

De Leon said she is “very much” happy with the results of the auction, adding that the swap offer lessens refinancing risk and extends maturity.

The Treasury sold the RTBs for as low as P5,000. Interest payments will be paid quarterly during the term of the bond.

Finance chief Benjamin Diokno earlier said the RTBs are an important component of government’s fundraising efforts to finance developing programs for sustainable, inclusive, and broad-based economy.

Proceeds of the issuance will be allocated to boost the country’s agriculture sector, infrastructure, education and healthcare systems, among others.

He emphasized that RTBs are safe, low-risk and affordable, allowing Filipinos to contribute to nation-building and grow their savings, at the same time.

RTBs have been the strongest performing financial instrument in the Treasury’s portfolio of bond offerings in the last two decades.

The Treasury has been issuing RTBs since 2001 to support financial inclusion and literacy among Filipinos by making government securities more accessible to small investors.

Since 2001, the government has raised over P4.37 trillion from RTBs. RTBs now account for 35 percent of the Treasury’s outstanding government securities.