The government plans to issue retail bonds in the first quarter of 2024 as part of its strategy to borrow more from domestic financial market, according to the Department of Finance (DOF).
It said in a statement the government aimed to issue the 30th tranche of its retail treasury bonds (RTB) within the first three months.
“The RTBs encourage ordinary Filipinos to start investing in safe and stable sources of passive income, while promoting financial inclusion,” the DOF said.
“To further this agenda, the BTr [Bureau of Treasury] is looking to engage more digital finance platforms, allowing the BTr to reach a wider investor base,” it said.
The country’s total financing requirement for the year is about P2.46 trillion, and the government said it would continue to adopt a 75:25 borrowing mix in favor of domestic sources.
“This prudent debt management strategy will allow the country to effectively mitigate foreign exchange risks, take advantage of the abundant liquidity in the country’s financial system, and support the development of the local debt and capital markets,” the DOF said.
The DOF said that in its efforts to further develop the local debt and capital markets, the BTr would spearhead several capital market development initiatives such as improving the government securities repo program and inclusion in an emerging market bond index.
It said that to fulfill its 2024 external financing program, the BTr is looking at various global bond markets, consistent with its objective of diversifying funding sources.
The DOF said it is also exploring a potential curtain-raiser offering in the first semester of the year.
The BTr raise P1.87 trillion in 2023 despite the challenging market environment, including 1.65 trillion from the issuance of domestic treasury bills and government securities and P220 billion from external commercial sources.
The funds raised by the BTr formed 85 percent of the gross financing requirement of the national government.
The funds raised domestically included P283.71 billion through the issuance of the 29th tranche of the retail treasury bond (RTB 29) and $1.26 billion (about P70.14 billion) for the second tranche of the retail dollar bond (RDB 2) that attracted investments from overseas Filipinos in over 32 countries.
The Philippines issued its first-ever tokenized treasury bonds (TTBs) in November 2023, paving the way for increased retail investor access and participation in the government securities market.
Meanwhile, the Republic of the Philippines (ROP)’s $3 billion (about P166.98 billion) global bond transaction in January 2023 received an overwhelming demand from investors with an oversubscription that peaked over nine times the offer.
The ROP’s maiden $1-billion (about P55.67 billion) Sukuk Bond, whose order book reached a peak oversubscription of 4.90 times, expanded the country’s financing avenues and further diversified investor base.
The BTr also generated an excess income of P63.7 billion, which supported the government’s priority programs.