P66-billion retail T-bonds sold at 4.875%

MANILA, Philippines — The government has successfully raised P66 billion from the sale of three-year retail treasury bonds (RTBs) during the first day of the offer period, the Bureau of the Treasury (BTr) reported yesterday.

During yesterday’s price setting auction, the debt papers maturing in 2021 fetched a coupon rate of 4.875 percent, 17.2 basis points higher than the previous rate of 4.703 percent.

Healthy demand met the price setting auction, as total tenders amounted to P92.79 billion.

The general investing public can participate in the fund raising activity until June 9.

According to National Treasurer Rosalia de Leon, the offering met strong demand and may continue to do so amid the ample liquidity in the financial system.

“I think we’ll have a good reception considering the liquidity in the system. So we have the redemption of P130 billion,” De Leon said.

De Leon said the securities were awarded at a higher rate than the previous auctions in line with the upward trajectory of rates in the Treasury.

De Leon said the 4.875 percent coupon rate would provide good returns to investors considering the recent rate hike by the Bangko Sentral ng Pilipinas (BSP) and the high inflationary environment.

“First, the BSP has hiked rates. At the same time, there are inflation expectations, so the curve has really moved up,” De Leon said.

Sought for comment, a local trader said the coupon rate awarded by the BTr is well within the expectation of the market.

They said the rate should be attractive enough for investors given the inflation environment, and the tenor of the debt papers.

The trader also said the demand was expected as there is reinvestment demand following the settlement of P130 billion in maturities last week.