The Bureau of the Treasury has raised an initial P120.76 billion well above the P30-billion on offer from the government's new five-year retail Treasury Bond (RTB) that generated total tenders of P183.44 billion at the launch Tuesday, Feb. 15.
The Treasury said small Filipino savers wanting to take a piece of the government’s RTB sale would earn higher interest rates than prevailing market rates.
Coupon rate for the five-year retail bonds fetched 4.875 percent, higher than the 4.4732 percent secondary market rate on Monday quoted by PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.
National Treasurer Rosalia V. De Leon told reporters after the auction that there was strong interest in RTB, the first issuance of such instrument this year.
While coupon penciled in rate liftoff, de Leon noted that this was mainly driven by higher inflation risk, particularly in the United States.
US inflation surged to a 7.5-percent annual rate in January, highest in 40-years. Domestically, the Bangko Sentral ng Pilipinas is closely monitoring the impact of the recent rally in global oil prices on domestic inflation.
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.
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.
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.