BTr defers auction of retail dollar bonds

MANILA, Philippines — The Bureau of the Treasury has deferred the issuance of retail dollar bonds (RDBs) amid the revert to stricter lockdown.

National Treasurer Rosalia de Leon yesterday said the Treasury would no longer pursue its plan to sell RDBs in August to Filipinos living abroad as it adjusts its operations to the reimposition of an enhanced community quarantine in Metro Manila.

De Leon said the agency has yet to reschedule the auction, but would monitor market developments for the time being.

Last month, the Treasury announced its plan to offer dollar-denominated bonds to overseas Filipinos in an effort to entice migrants to invest in long-term securities. The minimum placement for the RDBs is set at $300, making it accessible compared to the traditional US dollar bonds of $200,000.

Likewise, the government will assume the payment for the withholding tax on interest income. This way, investors will gain full interest on their principal as an incentive for lending cash to the government.

For the past weeks, the Treasury has initiated consultations with prospective investors on the details of the issuance.

The government looks to expand its borrowing program to P3.02 trillion this year to bankroll its pandemic measures, especially the vaccination program.

On an 85:15 ratio, the bulk of the financing at P2.58 trillion will be obtained from domestic investors, while the remaining P442.36 billion will be sourced from foreign lenders.

The Treasury yesterday awarded in full P15 billion of Treasury bills (T-bills) as investors flocked to the auction to push demand upward. Bids for the short-dated debt papers rose by more than eight percent to P54.855 billion, from P50.764 billion last week.

The rate for 91-day T-bills increased by 1.1 basis points to 1.064 percent, while that of 182-day securities picked up 0.6 bps to 1.407 percent.

On the other hand, the rate for the 364-day T-bills slipped by 0.7 bps to 1.625 percent.

This month, the Treasury plans to borrow a total of P200 billion from the domestic bond market through the auction of P60 billion in T-bills and P140 billion in Treasury bonds.