Gov’t eyes P30 B from 30th RTB issue

The government is borrowing at least P30 billion from small creditors as the Marcos administration sets its third offering of retail Treasury bonds (RTBs) to expand state coffers and finance various projects.

The Bureau of the Treasury informed government securities eligible dealers that it is launching the 30th tranche of its RTB (RTB-30) next week.

RTB-30, a five-year bond designed for retail investors as a low-risk and higher-yielding savings instrument, will be offered starting Feb.13.

The offer period is from Feb. 13 to Feb. 23 or any earlier date within the offer period as determined by the Treasury.

Bond settlement is scheduled on Feb.28. Interest payments will be paid quarterly during the term of the bond.

There is also a swap offer for bonds expiring on March 9 and March 12.

This will be the third RTB issuance since the Marcos administration assumed office in July 2022.

The maiden issuance in September 2022 raised a total of P420.25 billion with a coupon rate of 5.75 percent.

The second offering in February 2023 raised a lower amount of P283.711 billion and a higher rate of 6.125 percent.

Retail issuances have been a pivotal contributor to meeting the country’s overall funding requirements, as about 40 percent of outstanding government securities are retail instruments.

The proceeds of the fund raising activities are usually allocated to boost the country’s agriculture sector, infrastructure, education and healthcare systems, among others.

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

Since 2001, the government has raised more than P5 trillion from 29 tranches of RTBs to support financial inclusion and literacy among Filipinos by making government securities more accessible to small investors.

This year, the government plans to borrow P2.46 trillion, still adopting a 75:25 borrowing mix in favor of domestic sources.

Such a strategy aims to mitigate foreign exchange risks, take advantage of liquidity in the country’s financial system, as well as support the development of the local debt and capital markets.