Government raises P163 billion from RTBs

The government secured an initial P162.7 billion in the first offering of Retail Treasury bonds (RTBs) under the Marcos administration in a bid to boost state coffers for various recovery projects.

The Bureau of the Treasury on Tuesday launched RTB-28, a 5.5-year bond designed for retail investors as a low-risk and higher-yielding savings instrument.

With the offering, the Treasury raised an initial P162.72 billion after total tenders reached P225.32 billion, well above the P30-billion target offer.

Coupon rate fetched 5.75 percent, higher than the 5.434 percent and 5.64 percent BVAL Reference Rate, which is the standard for securities.

National treasurer Rosalia de Leon maintained that the initial auction results already showed strong interest from investors.

“RTBs serve as a stepping stone for making investments and fixed income securities easier and more accessible to all investors, especially to our small savers,” de Leon said.

The Treasury will sell the RTBs, for as low as P5,000 until Sept. 2, with settlement scheduled on Sept. 7. Interest payments will be paid quarterly during the term of the bond.

There is also a swap offer for bonds expiring on Sept. 13, Dec. 14, Dec. 6 of this year, and on Feb. 11, 2023.

Finance Secretary Benjamin Diokno said RTBs are an important component of government’s fundraising efforts to finance developing programs for sustainable, inclusive, and broad-based economy.

Proceeds of the issuance will be allocated to boost the country’s agriculture sector, infrastructure, education and healthcare systems, among others.

He said RTBs are safe, low-risk and affordable, allowing Filipinos to contribute to nation-building and grow their savings, at the same time.

RTBs have been the strongest performing financial instrument in the Treasury’s portfolio of bond offerings in the last two decades.

The Treasury has been issuing RTBs since 2001 to support financial inclusion and literacy among Filipinos by making government securities more accessible to small investors.

Since 2001, the government has raised over P4.37 trillion from RTBs. RTBs now account for 35 percent of the Treasury’s outstanding government securities.

Meanwhile, Land Bank of the Philippines will be the joint lead issue manager of the offering.

Investors may purchase RTB-28 for a minimum of P5,000 using the Landbank mobile banking application, as well as the mobile app of the Overseas Filipino Bank.

They can also make online placements through the Treasury’s online ordering facility and pay via online or over-the-counter placements via Landbank.

Holders of previously issued bonds may also exchange and reinvest their bond holdings for the latest bond offer.

Last February, Landbank generated a total of P87.8 billion in sales for the previous RTB-27.