Government sells P134 billion worth of retail treasury bonds

The Bureau of the Treasury on Tuesday awarded P134 billion worth of retail treasury bonds with a coupon rate of 4.375 percent in an auction nearly five times oversubscribed.

The huge demand prompted the committee to raise the acceptance from the initial offering of P30 billion. It was the 23rd issuance of RTBs by the government and the first for 2020. 

The bonds will have a three-year tenor and be offered to the general investing public for minimum denominations of P5,000 from Jan. 28, to Feb. 6, 2020.

National Treasurer Rosalia de Leon said the increasing participation in the RTBs and in the maiden offering of the Premyo Bonds “tells us that we are charting the right path in terms of making basic investment products accessible to Filipinos.”

“The Republic first launched the RTBs in 2001, and since then, it has not only become a staple fund-raising exercise for the national government’s priority programs but has also provided an avenue for the investing public to work together with the government to promote the advancement of the economy,” she said.

The government has been issuing RTBs as part of efforts to support financial inclusion and literacy among Filipinos by making basic investment instruments accessible to the public. The marketing and issuance of RTBs is in line with the move of the Republic to encourage the country’s unbanked population to open bank accounts as well as save and invest their money.

RTBs are generally considered low-risk for investors, allowing them to earn a fixed interest based on prevailing market rates and are paid quarterly during the term of the bond. In late 2019, the BTr issued the Premyo Bonds, which raised close to P5 billion.

The Premyo Bonds were received enthusiastically by the public, with 90 percent of the investors being individuals, some of whom had to open a deposit account so they could participate in the offering.

Proceeds from the issuance of RTBs will be used for general budgetary purposes, including critical infrastructure projects and social services. Interested investors of RTBs should have a peso account with selling agent banks accredited by the BTr. It is through this peso bank account that investors will receive their quarterly interest payments and principal amount on maturity.

To invest, one may approach their bank branch of choice or visit the BTr website via its online ordering facility.

For the latest transaction, the BTr is also introducing an exchange offer program where bondholders of RTB 3-08—the RTBs issued in April 11, 2017 maturing on April 11, 2020—will be allowed to exchange their RTB 3-08 holdings for this latest RTB offering.

The program aims to provide RTB 3-08 holders with a convenient reinvestment option for their current holdings at no cost. Interested holders just need to approach their broker/dealer to facilitate submission of their offers.

Topics: Bureau of the Treasury , retail treasury bonds , initial offering , Rosalia de Leon
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