The government is studying proposals from banks to handle the planned sale of at least P60 billion in RTBs (retail treasury bonds), National Treasurer Roberto Tan said Tuesday.

“We have the proposals. We are now assessing these,” Tan told reporters.

The government earlier planned to issue RTBs in two batches – one in the first half of the year and another batch in the second half – given the strong demand from retail investors.

Banks have submitted proposals for the second planned RTB sale, which could be held in November or earlier, and for a planned debt exchange, to be held in November.

Tan said the government has not firmed up the final date for both transactions but confirmed that the two activities would be completed within the remainder of the year.

The government is hoping to exceed the P179.9-billion set by the year's first RTB sale in February.

Earlier, Deputy Treasurer Eduardo Mendiola said the government is eyeing to issue at least P60 billion worth of 25-year RTBs as long-term debt would allow it to manage its liabilities better.

He said that as seen in the February RTB debt sale of 15-year and 20-year bonds, investors are already starting to feel comfortable parking their funds in long-term debt knowing they can sell this anytime in the secondary market.

RTBs are also attracting institutional investors who want safe havens for their investments.

RTBs are debt papers issued by the government for as low as P5,000. These instruments are ideal options for retail investors who want to park their funds in government debt papers.

After the RTB sale, the government will embark on a domestic debt exchange as part of its debt liability management strategy.

Under the plan, the government will exchange outstanding shorter-dated debt in the market with longer-dated papers.

The government currently has roughly P2.9 trillion in outstanding debt, some of which are illiquid bonds or those that trade a lot less frequently than other bonds.

The last time the government did a domestic bond exchange was in July 2011, in which investors offered to swap P323.5 billion worth of bonds for debt maturing in 2022 and 2031. Total accepted tenders amounted to P292.5 billion.

The average national government debt maturity lengthened to 10.18 years in 2011 as a result of the government’s debt liability management efforts.

The latest debt maturity profile is an improvement from the 8.8 years recorded in 2010 and the longest average maturity achieved since at least 2001, data from the Finance department showed.

Specifically, the average maturity of domestic debt stretched to 9.21 years as of last year from 6.7 years while the average maturity of foreign obligations extended to 11.36 years from 11.34 years. — BM, GMA News