BTr sells P113.8-B RTB in rate setting auction

For the first time, BTr will be selling the debt paper through online platform to individual account holders of Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP). (File Photo: Bureau of the Treasury/Facebook)

MANILA — The Bureau of the Treasury (BTr) on Tuesday raised PHP113.772 billion from the year’s first rate setting auction of five-year Retail Treasury Bonds (RTBs).

Coupon rate rose to 6.25 percent from the 4.625 percent it fetched during the same tenor’s last auction in November 2017.

Initially, the offer was set at PHP30 billion but it quickly rose to PHP120 billion due to the strong demand, with tenders totaling PHP121.807 billion.

National Treasurer Rosalia De Leon told journalists that the auction committee is “very pleased” with the outcome of the rate setting auction. “We see that investors view this as what we call a last call, last trip to be able to get these good rates because of the expectations that eventually rates will be trending downwards with inflation expectations also to continue to decline,” she said.

De Leon said investors’ confidence was boosted by the passage of the Rice Tariffication Act and the Bangko Sentral ng Pilipinas (BSP) Charter amendment, both measures which can help government mitigate inflation.

Rate of price increases decelerated to 4.4 percent last January and monetary officials expect this to go back to within the two to four percent target of the government this quarter.

Inflation is seen to benefit from the rice tariffication since it is projected to help decline inflation by 0.7 percentage points.

RTBs are intended for small investors and minimum placement is set at PHP5,000.

For the first time, BTr will be selling the debt paper through online platform to individual account holders of Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP).

De Leon said the online ordering form is available on the websites of the government financial institutions (GFIs) because these are the ones that are ready for this option.

Offer period for the RTB will be until March 8, 2019 while issuance will be on March 12.

Aside from the two government-owned banks the other Joint Lead Issue Managers are BDO Capital & Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, First Metro Investment Corporation, RCBC Capital Corporation, and SB Capital Investment Corporation as Joint Issue Managers.

Investors who are not account holders of Landbank and DBP can invest in the debt paper through the authorized selling agents namely BDO Capital and Investment Corporation, BDO, BPI Capital Corp., Chinabank, Citibank, PBCOM, CTBC Bank Corp., East West Bank, ING Bank, Maybank Philippines Inc., Metrobank, PNB, Philippine Business Bank, RCBC, Standard Chartered Bank, Security Bank, Union Bank, and UCPB.