Government eyes retail dollar bond offer by year-end

The Bureau of the Treasury (BTr) in the Philippines is mulling a retail dollar bond offering before the end of the year, as it seeks to raise funds from domestic investors. National Treasurer Sharon Almanza revealed that the government is still evaluating the concept of retail dollar bonds (RDBs), which would enable individual investors to lend money to the state and earn interest in dollars.

Almanza stated during a media briefing that the possibility of an RDB issuance remains open and is under consideration with the government's investment banks. The timing of such an offering, if it happens, would depend on market conditions, though Almanza did not rule out the possibility of issuing an RDB as early as the following month.

The amount the Treasury could raise from a potential RDB issuance has yet to be determined. This move comes as the government prepares for its final quarter, with a borrowing plan that will total P892 billion, more than double the P437 billion allocated for the same period last year. The rationale for the increased borrowing in the fourth quarter is partly due to the front-loading of government financing requirements in the first three quarters.

The RDB, if approved, would be classified as part of domestic borrowing, even though it would be denominated in dollars, as it would reflect the source of financing rather than its currency. The RDB offering would follow the recent peso-denominated retail Treasury bond issuance launched on September 29, where the BTr raised P84.886 billion from the 2.5-year RTB 32 auction, with total tenders reaching P188.637 billion.

The securities were offered at a 6.875 percent coupon rate, with the government targeting around P150 billion in new funds from the offering.