Bidders swarm RTB issue

MANILA, Philippines - The government sold yesterday P70 billion in retail treasury bonds (RTB) at a slightly higher rate in a week-long offer meant to raise more funds for its infrastructure spending.

The three-year RTB fetched an average rate of 4.027 percent, 15.4 basis points higher than the 3.873 percent fetched by existing 10-year RTB on the second market.

Coupon rate was set at 4.25 percent, higher than the 3.5 percent coupon rate seen at the last auction.

A total of P86.172 billion in tenders were recorded, nearly three times higher than the minimum P30 billion offered by the government.

National Treasurer Rosalia De Leon said investors have already priced in the expected rate hikes by the US Federal Reserve.

“At the same time, they are also looking at financing a wider (fiscal) deficit for infrastructure spending,” she told reporters after the auction.

De Leon said the rates and the tenor of the RTBs would cater to the appetite of the small investors as it provides a buffer for any eventual rate increases that may happen.

“If we want to really get the appetite of the small investors we have to also leave something behind for them. This is not just for the banks’ portfolio but for the retail investors,” De Leon said.

“I guess we also have to put more trust in terms of the RTB...that is why we also shortened the tenor so this is really more catering to their appetite,” she added.

RTBs form part of the Philippine government’s funding program and are offered to small investors to promote financial literacy and inclusion in the country.

This is the 19th RTB offering of the government, and the second under the Duterte administration.