Government eyes retail bond offering in H2
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 said.
The Philippine government plans to resume retail bond offerings this year, providing small investors with an alternative means to purchase government securities, according to the Bureau of the Treasury. National Treasurer Sharon Almanza confirmed the potential retail Treasury bond (RTB) issuance, though she did not specify the exact timing.
RTBs are considered low-risk savings instruments backed by the full financial capacity of the Philippine government and offer quarterly interest payments, with a minimum investment of P5,000.
Finance Secretary Frederick Go stated that the government is carefully monitoring market conditions and evaluating the appropriate time for a potential RTB offering, which is expected to occur within the second half of the year. The decision will be influenced by prevailing market developments and the government's financing requirements, as noted in June.
During last year's five-year 31st RTB offering, the government raised a total of P507.16 billion, featuring a coupon rate of 6%. This marked the first time that such securities were available through the GCash e-wallet platform via its GBonds feature. Almanza indicated that any future bond issuances would likely follow the government's customary mix, contingent on market conditions. These bonds could potentially be issued in euro, yen, or the usual dollar.
Ricafort, Rizal Commercial Banking Corp.'s chief economist, emphasized that key considerations for the upcoming issuance would likely include lower borrowing costs, which could be facilitated by including government bonds in the JPMorgan Emerging Market Bond Index. Additionally, timing the next RTB issuance to coincide with the maturity of 10-year RTBs, amounting to approximately P100 billion on September 20, 2027, could also be a strategic move.
Ricafort also highlighted the importance of hedging the national government's borrowings through RTBs due to the ongoing lack of progress in the deal between the United States and Iran after the 60-day interim deal expired on August 17.
The Marcos administration aims to raise a gross borrowing amount of P2.73 trillion this year, with an anticipated total of P3.3 trillion in 2027, as outlined in the latest Budget of Expenditures and Sources of Financing document.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
