Govt raises P134B from RTB offering
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Tue, 28 Jan 2020 16:30:27 +0000
THE government has generated P134 billion from its latest offering of retail treasury bonds (RTB), more than four times the amount it initially considered.
The Bureau of the Treasury (BTr), which announced an issue size of P30 billion last week, said on Tuesday tenders for the bond reached P121.8 billion on the first day of the public offer period that ends on February 6.
Small investors can buy the three-year RTBs, priced at a coupon of 4.375 percent, in minimum denominations of P5,000.
The last three-year RTB offered in May 2018 was priced at 4.875 percent.
In a statement, the BTr said proceeds from the offer would be used for general budgetary purposes, including critical infrastructure projects and social services.
The government has been issuing RTBs as part of efforts to promote financial literacy and wellness among Filipinos by making investments in government securities more accessible.
RTBs are generally considered low-risk for investors, allowing them to earn a fixed interest based on prevailing market rates and are paid quarterly over the term of the bond.
“The increasing participation in the RTBs and in the maiden offering of the Premyo Bonds tells us that we are charting the right path in terms of making basic investment products accessible to Filipinos,” National Treasurer Rosalia de Leon said in the statement.
First launched in 2001, RTBs has “not only become a staple fund-raising exercise for the national government’s priority programs, but has also provided an avenue for the investing public to work together with the government to promote the advancement of the economy,” she added.
According to the bureau, interested investors of these bonds should have a peso account with selling agent banks accredited by the BTr. It is through this peso bank account that investors would receive their quarterly interest payments and principal amount on maturity.
To invest, one may approach their bank branch of choice or visit the Treasury website via its online ordering facility.
For this transaction, the bureau also introduced an exchange offer program, in which bond holders of RTB 3-08 — the bonds issued on April 11, 2017 and to mature on April 11, 2020 — would be allowed to exchange these with the latest bonds offered.
The program aims to provide RTB 3-08 holders with a convenient reinvestment option for their current holdings at no cost.
Interested holders just need to approach their broker or dealer to facilitate the submission of their offers. For the first time, the National Registry of Scripless Securities, through its Switch Module, will serve as the electronic platform, on which offers to exchange would be submitted, allocated and settled.
The Development Bank of the Philippines and Land Bank of the Philippines are the joint lead issue managers for the 23rd RTB offering. BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp., PNB Capital and Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. are the joint issue managers.
The latest offering is the sixth during the Duterte administration, after the one in September 2016, one each in April and November 2017, one in May 2018 and one in February 2019.