The Philippine government, through its Bureau of the Treasury (BTr), launched its 32nd retail treasury bond (RTB) offering, dubbed RTB 32, aiming to raise at least ₱30 billion from domestic investors. The 2.5-year peso-denominated bonds, which will mature in 2029, are available for purchase in minimum denominations of ₱5,000. This offering, marking the 25th year of the government's retail bond program, runs from September 29 to October 7, with settlement scheduled for October 12. Holders of existing government securities also have the option to swap their holdings for the new RTB.
This new retail bond issuance comes as investor appetite for Philippine short-term government securities has softened. The Bureau of the Treasury recently raised ₱51.733 billion from short-term bill offerings, falling short of its ₱82-billion target, with yields on most tenors moving higher. Rising crude oil prices, with Brent crude above $107 a barrel, and El Niño concerns have contributed to these increased short-term bill yields, pushing benchmark rates to 5.535%, 5.862%, and 6.115% for various tenors.
National Treasurer Sharon P. Almanza indicated that the government plans to raise significantly less through this RTB offering compared to previous years, as it has other financing options for the remainder of the year. Last year, the government raised ₱507.16 billion from its 31st tranche of RTBs. The decision to scale back is also influenced by high domestic borrowing costs and a steep yield curve. The government is exploring other financing avenues, including a potential return to the retail dollar bond (RDB) market, as current domestic rates make dollar funding comparatively cheaper, despite foreign exchange risks.
