The Philippines is still planning to return to the retail bond market this year, giving small investors another opportunity to buy government securities, the Bureau of the Treasury (BTr) said.
‘Within the second half,’ National Treasurer Sharon Almanza told reporters on the potential retail Treasury bond (RTB) offering issuance, but did not specify the issuance date.
RTBs are relatively low-risk investment savings instruments guaranteed by the entire financial capacity of the Philippine government and offer quarterly interest payments.
Small investors can buy RTBs for a minimum of P5,000.
Finance Secretary Frederick Go said the government is closely monitoring market conditions and assessing the right time for a potential RTB offering, likely within the second half.
‘Any decision regarding any issuance will take into account prevailing market developments and the government’s financing requirements,’ he said in June.
Last year, the government raised a total of P507.16 billion from its five-year 31st RTB offering that carried a coupon rate of six percent amid ‘strong demand.’
It was the first time such securities were made available on e-wallet platform GCash through its GBonds feature.
Asked about the bond issuances being considered for next year, Almanza said these would likely follow the government’s ‘usual’ mix, depending on market conditions.
‘It depends on the market conditions. It may be in euro, yen or the usual dollar,’ she said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said among the crucial considerations for the next planned issuance are lower borrowing costs that could be made possible by including government bonds in the JPMorgan Emerging Market Bond Index.
‘Another consideration would be the upcoming maturity of 10-year RTBs worth about P100 billion on September 20, 2027, to possibly time the next RTB issuance to capture some of the said maturing RTBs,’ he said.
Ricafort said there would also be a need to hedge the national government borrowings through RTBs amid the lack of progress on the deal between the United States and Iran after the 60-day interim deal lapsed on Aug. 17.
The Marcos administration plans to raise P2.73 trillion in gross borrowings this year, followed by P3.3 trillion in 2027, according to the latest Budget of Expenditures and Sources of Financing document.