Philippines to offer P30B in retail treasury bonds

The Bureau of the Treasury��(BTr)��will offer peso-denominated, five-and-a-half-year retail treasury bonds��(RTB)��in a minimum principal amount of��P30 billion ($603 million), with a swap offer for bonds falling due in 2022, it said on Friday.��

The bond offer will be formally launched on Nov. 16 and follows the government’s first onshore retail dollar bond issue that raised $1.6 billion in September, helping boost funding for government programs to support the economy’s recovery.��

The papers will be issued on Dec. 2 and will mature by 2027.��

The��BTr��said they will suspend the auction of five-year and seven-year Treasury bonds on Nov. 16 and 23 to give way for the latest RTB offering.

This is the second RTB offering for the year following the three-year��RTBs��that were sold��in February. The government raised P463.3 billion from the��offering, which��was��the second-biggest RTB sale following the record P516.3 billion sold in five-year bonds in 2020.��

The Treasury is offering these bonds targeted for small investors that��want��low-risk, higher-yielding savings instruments backed by the national government.��

Minimum investments for the RTBs start at P5,000 and in multiples of P5,000 consequently.��

A trader said he expects the upcoming RTB sales to be well-received.��

“The tenor of 5.5 year is quite expected as the movement in the past week was pronounced on 5 to 7-year space,” he said in a Viber message.��

Yields on the five and seven-year Treasury bonds increased by 24.34 and 12.89 basis points week on week to 4.1571% and 4.6372% on Nov. 12, based on PHP Bloomberg Valuation Service Reference Rates as of Nov. 5 published on the Philippine Dealing System’s website.��

For 2021, the government wants to borrow P3 trillion from local and external sources to plug a budget deficit seen to hit 9.3% of the country’s gross domestic product. — Reuters with Luz Wendy T. Noble����