UPDATE 1-Philippines raises initial $2.35 bln from retail bond issue

Adds total tenders, national treasurer’s comments, 2022 borrowing plan

MANILA, Feb 15 (Reuters) – The Philippine government on Tuesday raised an initial 120.764 billion pesos ($2.35 billion) in an auction of five-year retail treasury bonds targetted at individual investors, with the coupon rate fixed at 4.875%.

Holders of previously issued fixed-rate treasury notes maturing on March 14 and July 4 can also swap their holdings for the peso-denominated 2027 retail bonds, the Bureau of the Treasury said in a notice.

The auction drew total tenders of 183.44 billion pesos, more than six times the 30 billion pesos offer.

The public offer period runs until Feb. 28.

National Treasurer Rosalia De Leon said the latest retail bond offering formed part of this year’s government borrowing plan seeking to raise as much as 2.2 trillion pesos, around 75% of which will be sourced from the domestic market.

“By maintaining a bias towards domestic sources of funding, we not only protect the government from foreign exchange risks, but more importantly, during this time we can take advantage of the (central bank’s) support to maintain an accommodative monetary stance,” she said during an online launch of the offer.

Ahead of its rate-setting meeting on Thursday, the central bank has expressed its resolve to maintain its policy support to sustain an economic recovery. nP9N2SY00MnL4N2UM2NI

Retail treasury bonds now account for about 30% of the government’s outstanding government securities, with last year’s two issues raising more than 830 billion pesos, which helped fund the government’s economic resilience and pandemic response measures, De Leon said.

($1 = 51.36 Philippine pesos)

(Reporting by Enrico Dela Cruz
Editing by Ed Davies)

((enrico.delacruz@tr.com;))