The Bureau of the Treasury expects to exceed the government's target for the retail dollar bonds (RDB) this week due to strong demand for investment instruments.
Officer-in-Charge Treasurer Sharon P. Almanza stated that within the first three days of the RDB's offer period, the government was already close to $1 billion in raised funds.
The government is confident that it will raise more than $1 billion by the end of this week. The offer period for the 5.5-year RDB will end on Friday, Oct. 6.
Last week, the government successfully raised $611.2 million through the initial sale of RDBs. This marked the first-ever issuance of RDBs by the Marcos administration to local investors, particularly targeting overseas Filipino workers (OFWs).
Finance Secretary Benjamin E. Diokno mentioned that the initial offering was $200 million, but due to the close-to-a-billion demand, they decided to raise it.
The total tender for RDBs reached $636.2 million, indicating strong investor interest.
The RDBs were issued with a coupon rate of 5.750 percent, surpassing the interpolated 5.5-year bond rate.
Premiums were provided for retail investors to promote the RDBs.
Gov't expects RDBs to rise over $1-B
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The government's target for the retail dollar bonds (RDB) is expected to be exceeded, as the Bureau of the Treasury reported a strong demand for investment instruments.
During the Chat with SBED briefing last Friday, Sept. 29, Officer-in-Charge Treasurer Sharon P. Almanza said that within the first three days of the RDB's offer period, which started on Sept. 27, the government was already approaching the $1 billion mark.
“It’s been three days, but we’re seeing the demand close to the $1 billion we initially targeted, Almanza told reporters.
“We are confident that until this week, we will be able to raise more than $1 billion,” she added.
The offer period for the 5.5-year RDB will conclude on Friday, Oct. 6.
Last week, the government has successfully raised $611.2 million through the initial sale of RDBs, marking President Marcos' first-ever issuance of such instruments to local investors, particularly overseas Filipino workers (OFWs).
The Treasury had planned to offer $200 million worth of RDBs. However, the response exceeded expectations, with investors oversubscribing the auction by more than three times.
Consequently, the government decided to increase the allocation for the 5.5-year RDBs.
“Actually, the initial offering was $200 because we really want to limit our indebtedness, we don't need to borrow too much, but demand is close to a billion as of today [Friday], so we might as well raise it,” Finance Secretary Benjamin E. Diokno said.
The overwhelming demand from investors resulted in a total tender of $636.2 million last week, highlighting a strong interest in investing in dollar-denominated bonds.
The RDBs were issued with a coupon rate of 5.750 percent, surpassing the interpolated 5.5-year bond rate based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates.
“We definitely provided some premiums for retail investors,” Almanza said. “It’s a way to promote also this RDB.
She also said the interest rate is reasonable.
“This is a new issue as well, it’s not going to be priced same as our secondary. We think it's a reasonable spread,” Almanza said.
RDBs are a type of government investment that provides individuals with a fixed interest rate over a specific period and guarantees the return of their initial investment at maturity.
These bonds are part of an initiative to make government bonds accessible to retail investors.