Government raises P162 billion from RTBs

MANILA, Philippines — The government managed to borrow an initial P162.2 billion in the second offering of Retail Treasury bonds (RTBs) under the Marcos administration in a bid to expand state coffers and finance various projects.

The Bureau of the Treasury on Tuesday launched RTB-29, a 5.5-year bond designed for retail investors as a low-risk and higher-yielding savings instrument.

With the offering, the Treasury raised an initial P162.18 billion after total tenders reached P196.11 billion, well above the P30 billion target offer.

Coupon rate fetched at 6.125 percent, higher than the 5.839 percent and 5.913 percent BVAL (Bloomberg evaluated pricing service) reference rate, which is the standard for securities.

During the RTB-29 launch, national treasurer Rosalia de Leon said the government is looking at traversing another journey through RTB 29 following its growing retail investor base.

“They have been with us through both favorable conditions and a challenging economic climate. It goes without saying that our retail issuance has always been an integral part of our funding operations,” De Leon said.

She said that retail issuances have been a pivotal contributor to meeting the country’s overall funding responsibilities as 38 percent of outstanding government securities are retail instruments.

“RTB 29 reflects our desire to forge much closer ties with our investors. It is also an affirmation of the Treasury’s signature offering carefully strengthened for almost 22 years of endeavor toward a more efficient retail market and smart choice of investment,” De Leon said.

Since 2001, the government has raised P4.8 trillion from 28 tranches RTBs to support financial inclusion and literacy among Filipinos by making government securities more accessible to small investors.

This year, the government targets to raise P2.21 trillion in borrowings, of which 75 percent or P1.65 trillion will be sourced domestically.

“Our bias for domestic borrowing is part of our prudent steps to hedge our position from adverse effects of exchange risks and also part of our sustainable borrowing,” De Leon said.

The Treasury will sell the RTBs, for as low as P5,000 until Feb.17, with settlement scheduled on Feb.22. Interest payments will be paid quarterly during the term of the bond.

There is also a swap offer for bonds expiring on March 8, April 21, and May 29 this year.

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

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

During the last RTB issuance in September 2022, the government borrowed a total of P420.45 billion with a coupon rate of 5.75 percent, higher than the 5.434 percent and 5.64 percent reference rates.