PH to launch dollar RTB offer this week

The government is planning to launch US dollar-denominated retail Treasury bonds (RTB) on Tuesday, Finance Secretary Benjamin E. Diokno said.

“We will launch the Retail Dollar Bonds 2 on Sept. 26,” Mr. Diokno said in a press briefing on Friday.

The Philippines’ last US-denominated RTB offer was in 2021, when it raised almost USD 1.6 billion.

Mr. Diokno said there will be a two-week offer for the RTBs.

“The minimum is just USD 200. And the tax, the government will be the one to pay. It’s tax-free, so it’s a good investment,” he said in mixed English and Filipino.

Mr. Diokno said they may consider increasing the offer size after seeing more interest from the public.

“I think initially it’s USD 1 billion, but the demand for the offering is too big. Maybe we can upsize,” he said.

The government earlier said it was targeting an offer size of USD 2 billion for the retail dollar bond offering.

Bureau of the Treasury Deputy Treasurer and Officer-in-Charge Sharon P. Almanza said the dollar retail bonds will either have a tenor of five years or 10 years.

“We’re looking at either five or 10 (year bonds), but most likely on the long five,” she added, noting that the offer will also be priced as a Republic of the Philippines (ROP) issuance.

Even if the retail dollar bond offer is upsized, Ms. Almanza said that there will be no need to adjust the government’s borrowing plan.

“The RTB is considered domestic, although of course its dollar denominated. For the domestic, we’re still about to raise 30%, so I don’t think we’ll be exceeding. If ever, we’ll be adjusting the (peso-denominated) Treasury bond issuances,” she added.

This year, the government’s borrowing plan is set at USD 2.207 trillion, consisting of PHP 1.654 trillion from domestic sources and PHP 553.5 billion from foreign sources.

From the January-to-July period, gross borrowings rose by 24.8% to PHP 1.55 trillion. Of this, gross domestic debt jumped by 28.4% to PHP 1.17 trillion.

The BTr is also targeting to launch Sukuk bonds within the fourth quarter this year. Mr. Diokno said that the Sukuk bonds will likely have an offer size of USD 1 billion.

“These are Islamic issuances that will diversify the government’s sources of financing, widen our investor base, and boost investments in physical and digital connectivity,” he added.

This would also mark the Philippine government’s first issuance in the Islamic bond market. — Luisa Maria Jacinta C. Jocson