BTR raises more cash as investors still bet on low-risk govt securities

Days before the start of the public offer period for the fiveyear Retail Treasury Bonds (RTBS), the Bureau of the Treasury raised P20 billion in Treasury Bills (T-bills) on Monday’s auction as investors continue to put their money on low-risk government securities.

As strong demand for safe-haven assets prevail, rates across all tenors dropped.

National Treasurer Rosalia V. De Leon told reporters that “rates dropped because investors prefer safe haven and shorter tenor government securities.”

The auction was oversubscribed by nearly 4.7-times as tenors attracted tenders amounting to P93.974 billion.

Broken down, the Treasury raised P5 billion each for 91-day and 182-day T-bills and P10 billion for

364-day T-bills.

The 91-day debt papers fetched an average rate of 1.587 percent, slipping by 6.2 basis points from the previous rate of 1.649 percent. Bids for the security reached P21.065 billion, more than four times as much as the P5 billion offering.

The 182-day T-bills capped at an average rate of 1.687 percent, plunging by 6.3 basis points from 1.750 percent previously. It attracted total tenders of P27.1 billion, more than five times the P5 billion offering.

The 364-day T-bills settled at an average rate of 1.782 percent, plummeting by 7.3 basis points from 1.855 percent from the previous auction. Bids for the tenor reached P45.809 billion, more than four times the P10 billion offering.

The Treasury earlier programmed to borrow P205 billion from the local debt market this month.

While De Leon said the drop in the T-bill rates could be an indication of where the RTBS would be, she said there are still incentives for individuals to park their cash in the medium-term to long-term investment product.

existing eligible bond holders may also opt not to wait for maturity as they are allowed to exchange their bond holdings with the new RTBS.

“RTBS are more safe; very minimal risk since [these are] government issued. And investing in RTBS you invest for your future and support government towards a quick recovery. That is more rewarding,” De Leon said.

RTBS are generally considered low risk for investors as these allow them to earn on a fixed interest based on prevailing market rates and get paid quarterly during the term of the bond.

For minimum denominations of P5,000, the general investing public is given the chance to take advantage of the issuance during the offer period.

Last week, the Treasury announced that it is set to offer a minimum of P30 billion in 5-year RTBS from July 16 until August 7.

The issuance of new RTBS due 2025 also comes with an exchange offer for RTB 10-01, RTB 10-02, FXTN (Fixed Rate Treasury Note) 05-73 and/or FXTN 07-57.

To ensure wider participation of individual investors, they may also order and purchase the new RTBS through online channels, such as the Bonds.ph mobile application by the Union Bank of the Philippines and the RTB online-ordering facility through the Treasury website. These are settled via payment facilities of China Banking Corp., Development Bank of the Philippines, First Metro Securities and Brokerage Corp. and Land Bank of the Philippines Inc.

Prior to the lockdown on March 17, the Treasury was able to raise P310.8 billion in 3-year T-bonds in a 1-week offer period that started on January 28 and ended on February 4.