Government raises P121.765 B from swamped RTB sale

MANILA, Philippines — The government has issued P121.765 billion worth of retail treasury bonds (RTBs) maturing in 2021 at a coupon rate of 4.875 percent, the Bureau of the Treasury (BTr) said.

National Treasurer Rosalia De Leon said the government raised the amount through the offering of three-year RTBs from May 30 to June 8, 2018.

This is higher than the initial volume size of P30 billion, an oversubscription of more than four times.

However, this is less than half the P255.4 billion generated by the BTr during its previous RTB sale in November last year.

De Leon said the BTr tried to temper demand by accepting a coupon rate of only 4.875 percent during the RTB’s price setting auction last May 30.

“They (investors) want a higher rate, but we only accepted coupon of 4.875 percent during the auction since we are not looking for a similar volume,” she said.

Earlier, De Leon said the government will not accept volume as large as the P255.4 billion raised during the previous record high RTB sale since the government conducted this fund-raising activity.

She said the government still remains in a good financial position, with the Bureau of Internal Revenue and the Bureau of Customs posting strong revenue performance so far into the year.

Still, she cited the ample liquidity in the financial system – owing to the reduction in banks’ reserve requirements and the redemption of P131 billion worth of government securities – which led to the oversubscription of the bond sale.

This is the 21st time the Philippine government has offered RTBs to the general investing public.

According to De Leon, proceeds of the sale will be used to finance the projected fiscal deficit for the year and compensate for the past rejections made by the BTr during the course of the year.

RTBs form part of the Philippine government’s funding program.

The Philippine government is also eyeing to issue US-denominated global bonds and Samurai bonds or yen-denominated securities this year.

For 2018, the national government is programmed to borrow P889.51 billion from local and foreign lenders.