Gov’t raises from retail bonds B

The national government raised R121.77 billion from the sale of three-year retail IOUs targeted at small local investors amid strong demand, the Bureau of the Treasury said. National Treasurer Rosalia V. de Leon told Reuters that proceeds from the retail bonds issue will become part of the national budget.

The 2021 retail bond pays a coupon of 4.875 percent, with quarterly interest payments, making it a more attractive investment than keeping money in a bank.

The Duterte administration last issued a retail treasury bond in November last year, raising R255.4 billion from the five-year debt.

The Philippines is raising money to finance its $180billion "Build, Build, Build" program which aims to lift economic growth, create jobs and attract much-needed investments.

In March, the government also raised $230 million from the sale of panda bonds, a debut offering that drew strong demand and followed an issue of 10-year global bonds early this year, which raised $750 million.

It also plans to raise as much as $2 billion via bond issues denominated in yen and US dollars before the year ends.

Earlier, Finance Secretary Carlos G. Dominguez III said the government was not inclined to raising the borrowing ceiling for retail bonds targeted at local small investors despite strong demand.

According to Dominguez, the government kept its borrowing program as is despite expectations of stronger demand for the bonds after the Bangko Sentral ng Pilipinas (BSP) lowered its reserve requirement.

The Treasury initially raised R66 billion worth of three-year RTB during the price-setting auction, which was more than double than the originally planned R30 billion.

The RTBs’ coupon rate was 17.2 basis points higher than the previous average of 4.703 percent, while demand amounted to R92.79 billion, more than thrice the issue size.

The Treasury offered the bonds to the retail market from May 30 to June 8. (With Reuters)