Gov't sells P128-B 25-yr RTBs

MANILA, Philippines - The government has so far sold P128 billion worth of 25-year retail treasury bonds (RTBs), boosting the possibility that demand may breach the previous sales record of P179.9 billion with more than a week to go until the end of the two-week offer period, Deputy Treasurer Eduardo Mendiola said yesterday.

With still a long way to go before the offer period ends on Oct. 22, demand for RTBs could go as high as P200 billion.

In a separate memorandum, Mendiola said government-owned or controlled corporations (GOCCs) and local government units interested in buying RTBs may now place their orders in any of the 23 qualified selling agents.

The Treasury also cancelled the Oct. 15 Treasury bill auction and Oct. 23 auction for Treasury bonds to make way for the RTB sale.

On Oct. 9, the Philippines sold an initial P62.988 billion in 25-year RTBs at a coupon rate of 6.125 percent.

The bonds are being offered to the public until Oct. 22 to 23 selling agents led by issue managers, the Land Bank of the Philippines and Development Bank of the Philippines.

Because of the anticipated strong demand for RTBs, the government may reduce the domestic borrowing program for the first quarter of 2013.

RTBs are ideal options for retail investors who want to park their funds in government debt papers.

The 23 selling agents for the RTBs are Allied Banking Corp., ANZ Banking Group Limited, BDO Capital and Investment Corp., BDO Universal Bank, BPI Capital and Investment Corp., China Banking Corp., Chinatrust Banking Corp., Chinatrust Philippines Commercial Banking Corp., Citibank, Deutsche Bank, Eastwest Banking Corp., First Metro Investment Corp., Hongkong and Shanghai Banking Corp., ING Bank, Maybank Philippines, Metropolitan Bank & Trust Company, Philippine National Bank, Rizal Commercial Banking Corp., Security Bank, Standard Chartered Bank, Sterling Bank of Asia, Union Bank of the Philippines and the two issue managers, state-owned Land Bank of the Philippines and the Development Bank of the Philippines.

After the planned RTB sale, the government will embark on a domestic debt exchange as part of its debt liability management strategy in early December instead of November as earlier announced.

Mendiola said banks asked for more time to prepare for the debt exchange.

Under the plan, the government will exchange outstanding shorter-dated debt in the market with longer-dated papers.