Philippine Treasury raises P167.25 billion in RTB 32 sale, exceeding target

The Bureau of the Treasury raised P167.25 billion in new money from its latest retail Treasury bond sale, exceeding its P150 billion target. The strong demand gives the government more flexibility in its borrowing programme amid volatile markets.

The Philippine Bureau of the Treasury (BTr) raised P167.25 billion in new money from its latest retail Treasury bond (RTB 32) sale, with the public offer period closing on 7 Oct. The amount comprised P84.86 billion from the initial rate-setting auction on 29 Sept and P82.39 billion through the public offer period, the Treasury said.

National Treasurer Sharon P. Almanza confirmed in a Viber message that the Treasury achieved its target volume. Reports on retail investor participation and volume are still being finalised. The Treasury limited the public offering to retail investors starting 1 Oct, and the amount raised from the bond exchange component will be announced later.

The two-and-a-half-year bonds carry a coupon rate of 6.875 per cent and will be issued and settled on 12 Oct. The P167.25 billion raised exceeded the BTr's previously indicated P150 billion new-money objective, according to Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion. He said the result was modestly above market expectations, especially amid elevated interest rates, lingering inflation concerns and heightened financial market volatility.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas described the P168 billion issuance as a strong result that reinforces investor confidence and improves the government's funding flexibility. He said it bodes well for the execution of the remaining 2026 borrowing programme.

Despite the strong take-up, Mr Asuncion said the result is unlikely to materially alter the government's broader borrowing strategy given its remaining financing requirements for the year. He expects the Treasury to maintain a diversified approach, possibly by issuing fresh fixed-rate Treasury notes and tapping offshore markets opportunistically.

A trader said the BTr will need to be more aggressive and take advantage of demand for shorter tenors, as upward pressure on yields is not expected to reverse in the medium term. The trader added that the BTr could have raised up to P30 billion from the exchange programme, and that tapping dollar bonds is already part of the programme and not a replacement for funding needs, especially for the next fiscal year.