Gov’t sells P9 billion of retail Treasury bonds

MANILA, Philippines - The Bureau of the Treasury awarded P9.124 billion worth of retail Treasury bonds (RTBs) against an P8 billion offer at an auction Friday, seeing the strong demand for the debt papers and the "reasonable" rates the market demanded. The three-year paper fetched a coupon rate of 8.5%, while five-year paper fetched a coupon rate of 9%. At the last retail Treasury bond auction in July last year, the three-year paper fetched 6.874%, and the five-year paper, 7.125%. Tenders for the three-year bond reached P11.288 billion against a P4-billion offer. The Treasury awarded P4.443 billion worth of debt papers. Against a P4-billion offer of the five-year bond, tenders reached P11.116 billion. The Treasury awarded P4.681 billion of the securities. "We expected good demand for this issue," said National Treasurer Roberto B. Tan. "It is reasonable, it is good for the small savers." RTBs are designed mainly for individual or small investors. The paper is sold for as low as P5,000 each and is available in multiples of P5,000 thereafter. Mr. Tan said a roadshow will be held next week in Cebu, Davao, and Cagayan de Oro to drum up interest in the bonds. "RTBs are for those keen on securing longer term investments," he added. The Treasury bureau cancelled two bond auctions this month, which should have raised P14 billion, to make way of the retail bonds auction. The government can raise more than P33 billion worth of RTBs, Mr. Tan said. "The indication is very healthy. There is a very good demand. You have better coupon rates compared to previous RTB auctions," he added. The Treasury bureau has chosen First Metro Investment Corp., BPI Capital and the Development Bank of the Philippines as arrangers of the issue. — Ruby Anne M. Rubio, BusinessWorld