Domestic Bonds

BTr postpones auction of retail dollar bonds


Elijah Felice Rosales (The Philippine Star) – August 10, 2021 – 12:00 am

MANILA, Philippines – The Treasury Office has postponed issuance of Retail Dollar Bonds (RDBs) as part of the return to tighter foreclosure.

National Treasurer Rosalia de Leon said yesterday that the Treasury will no longer pursue its plan to sell RDBs in August to Filipinos living abroad as it adjusts its operations to the reimposition of a strengthened community quarantine in the metropolitan area from Manila.

De Leon said the agency has yet to reschedule the auction, but will monitor developments in the market for now.

Last month, the Treasury announced plans to offer dollar-denominated bonds to foreign Filipinos in an attempt to encourage migrants to invest in long-term securities. The minimum investment for RDBs is set at $ 300, making it affordable compared to traditional US dollar bonds of $ 200,000.

Likewise, the government will assume the payment of withholding tax on interest income. This way, investors will get full interest on their capital to induce them to lend money to the government.

In recent weeks, the Treasury has engaged in consultations with potential investors on the details of the issue.

The government is looking to expand its borrowing program to 3.02 trillion pesos this year to finance its pandemic measures, particularly the immunization program.

On a ratio of 85:15, the bulk of the funding, amounting to 2.58 trillion pesos, will come from domestic investors, while the remaining 442.36 billion pesos will come from foreign lenders.

The Treasury allotted a total of 15 billion pesos in treasury bills yesterday as investors flocked to the auctions to push demand higher. Offers for short-term debt securities rose more than eight percent to 54.855 billion pesos, from 50.764 billion pesos last week.

The 91-day Treasury bill rate rose 1.1 basis points to 1.064 percent, while the 182-day Treasury bill rate rose 0.6 basis point to 1.407 percent.

In contrast, the 364-day Treasury bill rate fell 0.7 bps to 1.625%.

This month, the Treasury plans to borrow a total of 200 billion pesos in the domestic bond market through the auction of 60 billion pesos in treasury bills and 140 billion pesos in treasury bonds.