Gov’t sells P162-B bonds to retail investors

Small Filipino savers wanting to take a piece of the government’s retail Treasury bond (RTB) sale would earn higher interest rates than prevailing market rates.

The Bureau of the Treasury launched on Tuesday, Feb. 7, the government’s new 5.5 year RTB, raising an initial P162.2 billion as total tenders reached P196.1 billion.

The amount raised at the the price setting auction of the peso-denominated debt was well above the P30 billion on offer.

Coupon rate for the 5.5-year retail bonds fetched 6.125 percent, higher than the 5.839 percent to 5.913 percent secondary market rates quoted by PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

The 5.5-year RTB will be sold from Feb. 7 to 17 with a swap offer for bonds expiring on March 8, April 21 and May 29, 2023.

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

This is President Marcos’ second RTB. The last time he sold debt to retail investors was in September 2022, during which the government borrowed P420.25 billion of the five-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 29th of its kind made since its inception.

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 P4.8 trillion from the sale of the bonds with denominations as low as P5,000 in the past 22-years.