Gov’t raises P255B from retail T-bonds

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The government is seeking funds to help finance its massive P8.44-trillion infrastructure drive until 2022, when President Rodrigo R. Duterte ends his six-year term.

THE GOVERNMENT has raised some P255.4 billion from its second sale this year of retail Treasury bonds (RTBs), the Treasury bureau said in a statement on Monday, noting that “strong public demand led the RTBs to be oversubscribed multiple times.”

The Treasury had initially set its offer at P30 billion.

It issued P181 billion worth of RTBs on March 28-April 6 in 2017’s first sale of these debt papers.

In its statement yesterday, the Treasury said it issued P125.4 billion worth of five-year RTBs during the Nov. 20-27 public offer period, in addition to the P130 billion issued in the auction on the first day. These RTBs carry a 4.625% coupon and will mature in 2022.

Citing strong demand, the Treasury cut short the RTB public offer two days ahead of the original Nov. 29 end date.

“The overwhelmingly positive response from the public shows that an increasing number of Filipinos are saving and investing, as well as considering the long-term benefits of investments for themselves and their loved ones,” the same statement quoted National Treasurer Rosalia V. de Leon as saying.

The Treasury added that the timing of the sale enabled it to tap “the added liquidity in the market ahead of the Christmas season.”

“The benefits of RTBs are multifold: these instruments help achieve financial stability for individuals and families, and, at the same time, allow ordinary Filipinos to profoundly contribute to nation-building,” Ms. De Leon added.

The government hired state-run Land Bank of the Philippines and Development Bank of the Philippines as joint lead issue managers for the 20th RTB offer, while BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp. and SB Capital Investment Corp. acted as joint issue managers.

After this, the government also has plans to tap the offshore market next year, involving some $200 million worth of yuan-denominated “panda” bonds and $1 billion worth of dollar-denominated global bonds. Finance Secretary Carlos G. Dominguez III said on Wednesday the offshore offerings can be expected to take place some time next quarter.

The government is seeking various ways to help finance its aggressive P8.44-trillion infrastructure development program until 2022, when President Rodrigo R. Duterte ends his six-year term.

Besides running after big-time tax cheats — who Mr. Dominguez believes could each add P20-30 billion to state coffers — the government is also pursuing a four- to five-part overhaul of its tax system, the first of which is in the homestretch to enactment. The first package is expected to yield P100-130 billion in the first year of implementation.

With the success of the second RTB sale, one trader said “they (the government) already reached their goal.”

“With the next two auctions worth P40 billion, they can already reject bids which are too high for them,” the trader said.

Aside from the bond auction scheduled today, the Treasury plans to conduct two more auctions on Dec. 11 and 19 with offers cumulatively worth P40 billion. — Karl Angelo N. Vidal