Retail T-bonds offer still oversubscribed

The Duterte administration sold yesterday P65 billion in retail Treasury bonds at a slightly higher rate in a week-long offer meant to raise funding for its higher spending plans.

A total of P123.74 billion in tenders were recorded, more than four times the minimum P30-billion offered by the government, helping push down the coupon rate to 3.5 percent.

The rate, however, was still up 25 basis points from the 3.4 to 3.425 percent fetched by existing 10-year papers on the secondary market where investors trade with each other.

Although not comparable, RTBs of similar tenor issued in August 2013 recorded a 3.25-percent rate. The government awarded P149 billion then.

“There was a very good turnout of our auction to price the RTB. It was more than four times oversubscribed,” National Treasurer Roberto Tan told reporters.

“The last issue was three years ago. So many things have already happened. This just means that the pricing though has been quite stable,” he said after the auction.

This year’s offer will run until Sept. 16 and Tan said the government would award according to how demand would turnout.

Seven investor roadshows nationwide will also be held to increase awareness on the issue, which targets retail individual investors who can invest for a minimum of P5,000.

The first one will be held in Davao City, followed by those in Cebu, Iloilo, Naga City, Batangas, Baguio, Makati City and in Manila.

Sought for comment, a bond trader at a local bank agreed the issue has been well received by investors who are still positive on Philippine macroeconomic fundamentals.

“It was a good rate and the good turnout was driven by onshore reinvestment requirements as well as the general optimism on the local economy,” she said.

Asked if she expects the government to award more RTBs this year than in 2013, the trader said it would depend on its preference and cash requirements.

Tan said the RTB issue is part of this year’s borrowing program, which has still “not yet been filled out” so far, especially given higher spending plans.

“As you know, we are ramping up our infrastructure expenditures as well as the provisions of the social services, human capital development,” Tan said.

“This is part of the whole financing (requirements) for the government,” he added.

Interested investors may purchase RTBs from the Bureau of the Treasury’s 15 selling agents namely BDO Unibank Inc., China Banking Corp., Citibank N.A., Development Bank of the Philippines, East West Banking Corp., Land Bank of the Philippines and Metropolitan Bank and Trust Co.

Also selling RTBs are Philippine Bank of Communications, Rizal Commercial Banking Corp., Security Bank Corp., ING Bank, BPI Capital Corp., First Metro Investment Corp., Robinsons Bank Corp. and BDO Capital and Investment Corp.