Gov’t to sell P30-B retail bonds in Feb.

Published February 13, 2022, 9:00 PM

by Chino S. Leyco

The government will sell P30 billion, its first retail Treasury bond (RTB) for the year catering to small Filipino savers, the Bureau of the Treasury announced.

In a notice, the Treasury bureau said the government will launch this month another RTB, offering a minimum principal amount of P30 billion.

According to the bureau, the five-year RTB will be sold between Feb. 15 and Feb. 28 with a swap offer for bonds expiring on March 14 and July 4, 2022.

The prevailing market rate for five-year Treasury bond last Friday was at 4.433 percent.

The government-owned and -controlled companies (GOCCs) and local government units (LGUs) are also encouraged by the Treasury to participant in this new fund raising program.

GOCCs and LGUs may place their orders for the RTR beginning Feb. 15 through Land Bank of the Philippines and Development Bank of the Philippines, the treasury said.

The bureau, meanwhile, cancelled the regular auction of seven- and 10-year Treasury bonds scheduled on Feb. 15 and 22 to give way to the RTB sale.

Proceeds from the retail bond sale will finance the projected higher budget deficit this year.

The last time the government sold debt to retail investors was in November 2021, during which it borrowed P360 billion of the 5.5-year papers.

Of that amount, a total of P330.5 billion and P29.5 billion were raised in new money and bond exchange, respectively.

The RTB is made available for as low as P5,000 through the traditional over- the-counter placement in bank branches.

The IOUs were also sold through digital channels such as the treasury’s RTB Online Ordering Facility, the Bonds.PH mobile app, the Overseas Filipino Bank Mobile Banking App, and the Land Bank Mobile Banking App.

This retail bond offer will be the 10th of its kind made during the Duterte administration.

The issuance of retail bonds has been 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.

The government has been tapping funds from individuals since 2001 and had raised more than P1 trillion from the sale of the bonds with denominations as low as P5,000 in the past 21-years.