THE GOVERNMENT raised P463.3 billion in three-year retail Treasury bonds (RTBs) on Thursday to mark its second-biggest issuance of retail bonds so far, as investors continued to flock to safe-haven assets.
The Bureau of the Treasury (BTr) said in a statement on Thursday that P411.8 billion of the total was raised in fresh funds referred to as “new money,” while P51.5 billion came from the bond exchange program.
This marked the Treasury’s first jumbo issuance of the year and 25th overall. It was also the second-biggest RTB sale in history, following the record P516.3 billion sold in five-year bonds last year.
The latest issuance was still higher than the P310.8 billion raised in three-year RTBs in February 2020.
“RTB 25 demonstrates increasing awareness of retail investors on government securities not only as a safe and convenient investment particularly with easy access with mobile applications, more so, a way of contributing to a strong and inclusive economic rebound,” National Treasurer Rosalia V. de Leon told reporters via Viber.
The offer period began on Feb. 9 in which the BTr raised an initial P221.2 billion, and closed as scheduled on Thursday.
About 12% of the total or P55.6 million was raised through online platforms and mobile applications, according to the Treasury.
A bond trader said demand should have been higher if the retail bonds were offered after the release of February inflation data to lure more investors with higher yields.
“If they issued after CPI (consumer price index), the yield could have been much higher and more attractive,” the trader said via Viber.
February inflation data will be released on Friday. A BusinessWorld poll of 16 analysts last week estimated inflation may have reached 4.8% in February, at the higher end 4.3% to 5.1% central bank’s estimate but beyond the 2-4% annual target.
The RTBs carried a coupon of 2.375% per annum and were offered in minimum investments of P5,000.
RTBs target small investors because these are deemed low-risk assets with relatively high returns.
Proceeds of the fund-raising activity will partially fund this year’s P4.5-trillion budget and support the economy’s recovery.
For the third time, the RTB was offered with a bond switch program. The BTr said it was “well-received” after 12.9% of the total eligible bonds had been swapped for the new debt papers.
Last year, the BTr raised P827 billion through its two RTB sales in February and August.
Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) are the joint lead issue managers for the transaction.
Meanwhile, the joint issue managers are LANDBANK, DBP, BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp. (FMIC), PNB Capital and Investment Corp., RCBC Capital Corp., SB Capital Corp., and UnionBank of the Philippines, Inc.
Gross borrowings of the government reached P2.74 trillion in 2020, up by 168.63% from P1.02 trillion seen the year prior.
This year, the government is eyeing to borrow P3 trillion to plug the budget deficit seen to widen to 9.6% of gross domestic product as the economy recovers from pandemic-induced recession. — Beatrice M. Laforga