THE PHILIPPINE government on Tuesday raised an initial P162.180 billion in an auction of retail Treasury bonds (RTBs), the second under the Marcos administration.
In a statement, the Bureau of the Treasury (BTr) said the RTBs were met with strong demand.
Tenders at the rate-setting auction hit PHP 196.109 billion, or more than six times the P30 billion on offer at the BTr’s first retail bond offer this year.
The five-and-a-half-year RTBs fetched a coupon rate of 6.125%, 37.5 basis points (bps) higher than the 5.75% set for the previous RTB offering in August.
The papers were awarded at rates ranging from 5.375% to 6.24%, bringing the average to 6.022%.
The RTBs’ coupon rate is also 28.56 bps higher than the five-year debt papers quoted at 5.8394% in the secondary market, based on the PHP Bloomberg Valuation (BVAL) Reference Rates published on the Philippine Dealing System’s website.
National Treasurer Rosalia V. de Leon said in a Viber message to reporters that the auction had a “good outcome with rates lower than [the rates posted on] BVAL.”
“This (coupon rate) is well-within the expected range and overall good for those looking for an alternative investment outlet,” a trader said in a Viber message.
“It is higher than the going BVAL rate because of the expected higher volume of issuance or supply compared to the usual bond offerings,” the trader added.
The rate issued was higher than that of the secondary market due to the faster-than-expected inflation print for January, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Inflation soared to a fresh 14-year high of 8.7% in January, from 8.1% in December and 3% a year ago. This was the fastest print since the 9.1% logged in November 2008.
“The latest CPI also helped the rate to nudge higher,” the trader added.
Mr. Ricafort noted that the large bids could lead to another jumbo, if not, record RTB issuance.
The RTBs target small investors who want low-risk, higher-yielding savings instruments backed by the National Government.
Investors can avail of RTBs with a minimum initial investment of P5,000 until Feb. 17, unless earlier terminated by the Treasury.
Holders of fixed-rate Treasury notes maturing on March 8, April 21, and May 29 this year can swap their holdings for the RTBs, the Treasury said. The minimum exchange offer is P5,000.
The offer period for the peso-denominated debt is from Feb 7 to 17, while settlement is on Feb. 22.
The RTBs’ maturity date is on Aug. 22, 2028.
Authorized selling agents for the RTBs are Asia United Bank, BDO Unibank, Inc., BDO Capital & Investment Corp., BPI Capital Corp., China Banking Corp., Citibank N.A., Development Bank of the Philippines, East West Banking Corp., First Metro Investment Corp., ING Bank N.V., Land Bank of the Philippines, Maybank Philippines, Inc., Metropolitan Bank & Trust Co., Philippine Bank of Communications, Philippine National Bank, Rizal Commercial Banking Corp., Robinsons Bank Corp., Standard Chartered Bank, The Hongkong and Shanghai Banking Corp., Ltd. and UnionBank of the Philippines. — Aaron Michael C. Sy