Philippines sells over P49.6B worth of retail treasury bonds

The Philippines sold P49.618 billion worth of retail treasury bonds (RTB) during

Tuesday’s auction, according to the

Bureau of the Treasury. Issued were 15- and 20-year RTBs with coupon rates of 5.375 percent and 5.875 percent, respectively.

Government sold P16.316 billion worth of 15-year debt and P33.302 billion of 20-year bonds .

Officials, however, said demand could exceed P100 billion at the end of the offer period on Feb. 28.

First Metro Investment Corp. president Juanchito Dispo said demand could reach P150 billion for the 15- and 20-year debt papers.

First Metro is one of the issue managers hired by government to sell the retail bonds.

The 20-year paper attracted more bids as investors, largely insurance companies, preferred longer term, risk-free opportunities for their money, said Dispo, adding “There’s better yield for the 20-year… It’s a highly tradable paper.”

Still, the First Metro executive believes there is more than enough money in the system to boost the demand for both tenors.

“The market is very liquid and it has to put that liquidity to work,” Dispo said.

In an interview with reporters, Deputy Treasurer Eduardo Mendiola said the final volume would depend on market demand.

“It’s up to the public if we hit P150 billion,” Mendiola said.

Retail investors should not be intimidated by long-term securities which can be can be easily traded in the secondary market, Mendiola said.

Banks tapped as issue managers and selling agents are on a roadshow in Baguio, Laoag, Clark, Pampanga, Davao and Cebu pitching the retail bonds to other investors, according to the Treasury Bureau.

The bonds are part of government’s savings mobilization program making government securities available to retail investors at P5,000 per placement and raising the savings rates among Filipinos.

Other issue managers for the latest bonds are Land Bank of the Philippines, Development Bank of the Philippines, Philippine National Bank, Metropolitan Bank and Trust Co., BDO Capital Corp., BPI Capital, China Banking Corp. and Deutsche Bank AG. — VS, GMA News

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