Initial P250 billion raised from RTB

In a text message to reporters, National Treasurer Rosalia de Leon said the new money raised from RTB-24 has already surpassed the P250 billion generated during the previous retail bond offering in February.STAR/File

MANILA, Philippines — Investors swarmed the government’s ongoing Retail Treasury Bond (RTB) sale as the total amount of “new money” raised has so far exceeded P250 billion, according to the Bureau of the Treasury (BTr).

In a text message to reporters, National Treasurer Rosalia de Leon said the new money raised from RTB-24 has already surpassed the P250 billion generated during the previous retail bond offering in February.

“New money in February was P250 billion. We have exceeded the new money,” de Leon said.

However, this does not yet include the amount sold by the Treasury under the switch tender component of the RTB offering.

In its previous retail bond issuance last February, the government was able to award P310.8 billion worth of three-year securities, the highest volume recorded for any of its RTB sale.

The BTr said P250 billion of the total amount came in the form of new investments, while P60.8 billion came from switch tender offers.

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The debt papers, which will mature in 2023, carry a coupon rate of 4.375 percent.

On the other hand, the five-year bonds under the government’s current RTB sale are priced at coupon rate of 2.625 percent.

During RTB-24’s price setting auction last week, the government was able to raise an initial amount of P192.71 billion after government securities eligible dealers placed tenders amounting to P278.57 billion.

This was already more than six times larger than the P30 billion initial offer volume set by the Treasury.

The retail bonds will be available to the public until Aug. 7, in minimum denominations of P5,000.

Proceeds of the RTB issuance will be used to aid the country’s efforts to mitigate the impact of coronavirus disease 2019 or COVID-19, and to support sectors most affected by the pandemic.

The bureau said this would also be used to fund infrastructure projects and other national government expenditures.

Aside from raising new money, RTB-24 also has a debt swap component, where holders of maturing bonds, particularly RTB 10-01, fixed rate treasury note (FXTN) 05-73, RTB 10-02 and FXTN 07-57, may exchange their old debt notes for the new RTBs.

RTB-10-01 is set to mature on Aug. 19, while FXTN 05-73 will mature on Aug. 20. RTB 10-02 will also be maturing on March 3 next year, while FXTN 07-57’s tenor will end on March 20, 2021.

To ensure the wider participation of individual investors in the RTBs, the BTr said investors may use the RTB online ordering facility through its website. Investors may also use the Bonds PH mobile application of the Union Bank of the Philippines.

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