The Philippines has commenced its retail bond auction, attracting significant demand as borrowing costs remain high. The Bureau of the Treasury aims to raise at least $30 billion (P30 billion) through the sale of 2.5-year peso-denominated retail Treasury bonds (RTBs), which mature in 2029. This offering, available from September 29 to October 7, marks the 32nd issuance under the government's 25-year-old retail bond program, allowing individual investors to purchase bonds for as little as $85 (P5,000).
National Treasurer Sharon P. Almanza indicated that the government plans to raise less than half of the $8.6 billion (P507.16 billion) generated from last year's RTB sale. This reduction is attributed to other available financing options and the government's strategy to manage borrowing costs amid a steep yield curve and inflation risks. Despite a target of $30 billion, the auction is expected to draw billions, highlighting continued investor appetite even as short-term bill yields have risen due to inflation and higher oil prices, with Brent crude above $107 a barrel.
The government also partially awarded its short-term bill offerings earlier in the week, raising $877 million (P51.733 billion) against an $1.4 billion (P82 billion) target, as attention shifted to the new RTB offer. The total amount raised from the domestic market in September was $5.4 billion (P320.299 billion), falling short of the $5.9 billion (P350 billion) goal. The funds from the RTB offering will contribute to financing the government's $28.2 billion (P1.659 trillion) budget deficit for the year.
