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Retail dollar bonds listed at PDEx

Elijah Felice Rosales – The Philippine Star

October 9, 2021 | 12:00am

MANILA, Philippines — The government   listed yesterday its first onshore retail dollar bonds (RDBs) at the Philippine Dealing and Exchange Corp. (PDEx), activating another source of financing for pandemic response.

National Treasurer Rosalia de Leon said the government has expanded its options for borrowing to beef up its pandemic resources with the successful issuance and  listing of RDBs in the PDEx trading platform.

“RDB is now part of the menu of domestic offering structures,” De Leon told The STAR.

The Bureau of the Treasury has raised $1.59 billion, or more than P80 billion, from the sale of RDBs mostly to overseas Filipino workers (OFWs). The amount exceeded by nearly four times the agency’s target of just $400 million.

The sale also introduced the use of digital platforms in buying government securities. According to the  Treasury, a total of 520 RDB transactions worth $810,000 have been processed through web and mobile-based channels.

As such, an average of $1,500 worth of investments were extended to the government for every transaction filed through online means.

During the RDB’s rate setting on Sept. 15, the Treasury awarded $551.8 million for the five-year tenor and $314.4 million for the 10-year issue, for a total of $866.2 million.

As investors can file bids for as low as $300 and increase them by $100 thereafter, the maiden program bagged a demand of $938.2 million to oversubscribe the offer by over twice.

During the initial sale of the financial instrument,  the five- year and 10-year debt papers fetched yields of 1.28 percent and 2.14 percent, respectively.

Further, the five-year RDBs quoted a coupon of 1.375 percent, while the 10-year RDBs obtained a coupon of 2.25 percent.

Finance Secretary Carlos Dominguez  said the government looks to maximize the results of the RDB offering to widen its sources of financing for pandemic interventions.

He also said domestic investors funded many of the response measures by buying debt papers auctioned by the Treasury.

The RDBs, for one, attracted investments from OFWs in at least 30 countries, including Cayman Islands, Cyprus and Papua New Guinea.

The government plans to borrow P3.07 trillion this year mainly from domestic sources to fund the country’s rising budget deficit.

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