Govt raises P113B from RTB offering
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 26 Feb 2019 16:38:59 +0000
THE government raised P113 billion — more than three times the amount initially considered — as it launched its latest retail treasury bond (RTB) offering.
The Bureau of the Treasury (BTr), which last week announced an issue size of P30 billion, on Tuesday said it sold P113.77 billion worth of RTBs during the first day of a public offer period that ends on March 8.
The five-year RTBs, priced at a coupon of 6.250 percent, can be purchased by small investors in minimum denominations of P5,000.
The last five-year RTB offered in December 2017 was priced at 4.625 percent.
“The resounding success of our RTB issuances highlights the increasing awareness of Filipinos on investment opportunities that do not only help them realize their personal goals, but also allow them to directly partake in building our nation,” National Treasurer Rosalia de Leon said in a statement.
The initial offer of P30 billion was more than four times oversubscribed with tenders hitting P121.8 billion.
The Philippine government has been issuing RTBs as part of its efforts to promote financial literacy and wellness among Filipinos by making investments in government securities more accessible to the public.
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.
Proceeds from the issuance will be used for health services, educational programs, and public infrastructure, among others.
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 principal and interest payments will be made.
The Treasury bureau is also introducing an online ordering facility to encourage wider participation among individual investors and expand reach to overseas Filipino workers (OFWs).
“Now that we are introducing the first ever online RTB ordering platform, we are confident that we will further expand our reach to individual investors by making investment in RTBs easily accessible,” de Leon said.
“Through financial technology, we are also allowing OFWs to participate in our RTB offering even if they are miles away from home,” she added.
The online RTB ordering platform is available for those who have peso accounts with Land Bank of the Philippines and the Development Bank of the Philippines (DBP). It can be accessed during the two-week offer period through http://www.treasury.gov.ph.
The DBP and Landbank are the joint issue lead managers for the RTB offering, while BDO Capital & Investment Corp. , BPI Capital Corp. , China Bank Capital Corp., First
Metro Investment Corp., RCBC Capital Corp., and SB Capital Investment Corp. as have been named issue managers.
The latest RTB offering is the fifth for the Duterte administration following two in 2017 (April and November), one in September 2016 and one in May 2018.
At P30 billion, the size is similar to the last RTB sale, which ended up with the government selling four times that or P121 billion. The May 2018 offering involved three-year RTBs with a 4.875-percent yield.
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