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Govt to borrow anew from small investors

The government is looking to raise money from small investors anew via a retail treasury bond (RTB) offering starting next week.

“Please be advised that the Republic of the Philippines through the Bureau of the Treasury will issue peso-denominated three-year fixed rate retail treasury bonds in a minimum aggregate nominal principal amount of P30,000,000,000.00,” the Treasury said in a notice on Friday.

It will be the fourth RTB offering for the Duterte administration following two in 2017 (April and November) and one in September 2016.

At P30 billion, the size is similar to the last RTB sale in November 2017, which ended up with the government selling eight times that at P255.4 billion.

The RTBs will have a three-year tenor and will be offered to the general investing public for minimum denominations of P5,000 between May 30 and June 8, 2018. The issue date will be on June 13, the Treasury bureau said.

The rate for next week’s offering is still being determined.

The November 2017 offering involved five-year RTBs with a 4.625 percent yield.

The bureau has said that RTBs are an opportunity for the investing public to access affordable and higher-yielding instruments.

“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,” National Treasurer Rosalia de Leon said last year.

Government borrowings such as RTBs pushed the country’s debt-to-gross domestic product (GDP) ratio higher in March this year, the Finance department recently reported.

The debt-to-GDP ratio rose to 56.2 percent as of end-March 2018 from 55.2 percent a year earlier, which the department attributed to the government’s opting to act “ahead of the projected triple adjustments in the [United States] Fed policy rate.”

Domestic debt subsequently rose to 36.5 percent of GDP from 35.4 percent the year before, offsetting a decline in the external debt.

The external debt-to-GDP ratio stood at 19.7 percent, marginally lower than the 19.8 percent last year.

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