BTr calls on Cebuanos to invest in retail bonds

The Bureau of the Treasury (BTr) encourages the Cebuano community to invest in its latest auction of new three-year retail treasury bonds (RTBs), the government's 21st issuance and first for 2018.

The RTBs are being offered to the investing public for minimum investment of P5,000 between May 30 and June 8, 2018.

On Friday, BTr conducted a roadshow in Cebu to invite investors here to participate in the latest bond sale.

BTr already raised P66 billion in the initial auction of RTBs which has a coupon rate of 4.875 percent.

Strong demand for the RTBs allowed the auction committee to increase the offering size to P66 billion from the initial P30 billion, with total tenders amounting to P92.8 billion.

Sought for comment yesterday, Cebu Bankers Club president Mario Fritz Palileo said so far the big banks have been receiving reservations, but subject to allocation from their head offices.

“The rates of treasury investments are better than the regular bank time deposit,” the bank executive said.

“So far this RTB has offered a higher rate considering it is only a three-year term,” Palileo told The FREEMAN yesterday.

He said commercial banks have so been offering LTNCDs (Long Term Negotiable Certificate of Deposits) with a term of 5.5 years but the rate is almost the same as the three-year RTB.

The Philippine government has been issuing RTBs as part of its efforts to promote financial literacy among Filipinos. Financial literacy is a key component to attaining inclusive growth, as it enhances the public's knowledge on available financial options, allowing them to make the best decisions for their finances.

RTBs are generally considered low-risk for investors, allowing them to earn a fixed interest based on prevailing market rates and are paid quarterly during the term of the bond.

In 2017, the BTr offered RTBs twice, in April and in December, raising a total of more than P430 billion.

“The increasing interest of Filipinos in RTBs has been particularly encouraging. We are delighted that more and more Filipinos are getting into the habit of investing as well as in taking part in the funding of the national government. RTBs are a viable way for Filipinos to achieve their financial goals and prepare for the future, while helping the Philippine government in its financing needs,” National Treasurer Rosalia De Leon said in a statement.

Proceeds from the RTB sale will got to the government's fundraising for its massive infrastructure program.

“The strategic timing of our issuances, as part of our proactive debt management strategy allowed us to do such transaction amid a favorable macroeconomic environment,” De Leon noted.

“We have always echoed the thought that the current inflation pressures are transitory, and that inflation figure will eventually return within the government's target range. Recent economic events opened an opportunity for us to issue RTBs when the market is liquid and rates are relatively lower,” the treasurer pointed out.

“We continue to see liquidity in the market, especially with many Filipinos benefiting from financial reforms recently introduced,” she said.

Those looking to avail of RTBs will find the process easy and convenient. Interested investors only need to have a peso account with the banks identified as accredited selling agents of RTBs. It is through the peso account that the principal and interest payments will be made. Land Bank of the Philippines is the lead issue manager for the 21st RTB offering. They are joined by BDO Capital & Investment Corp, BPI Capital Corp, Development Bank of the Philippines, Metropolitan Bank and Trust Co, and SB Capital Investment Corp as joint issue managers.

The RTBs will be available through any of 16 selling agents tapped by BTr mostly comprise of the country's top banks.