The Philippines raises initial PHP120bn from retail bond issue

  • The Philippine government raised an initial PHP120.8bn in an auction of five-year retail treasury bonds targetted at individual investors, with the coupon rate fixed at 4.875%.
  • Holders of previously issued fixed-rate treasury notes maturing on 14 Mar 22 and 4 Jul 22 can also swap their holdings for the peso-denominated 2027 retail bonds, the Bureau of the Treasury said in a notice.
  • The auction drew total tenders of PHP183.4bn, more than six times the PHP30bn offer. The public offer period runs until 28 Feb 22.
  • National Treasurer Rosalia De Leon said the latest retail bond offering formed part of the government’s borrowing plan in 2022 seeking to raise as much as PHP2.2tr, around 75% of which will be sourced from the domestic market.
  • “By maintaining a bias towards domestic sources of funding, we not only protect the government from foreign exchange risks, but more importantly, during this time we can take advantage of the [BSP’s] support to maintain an accommodative monetary stance,” she said during an online launch of the offer.
  • Retail treasury bonds now account for about 30% of the government’s outstanding government securities, with two issues raising more than PHP830bn in 2021, which helped fund the government’s economic resilience and pandemic response measures, De Leon said.

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