By DOTr PRI
Manila, Philippines – In a remarkable financial development, the Philippine government has successfully raised a staggering USD611.2 million in its second offering of Retail Onshore Dollar Bonds (RDB 2). This impressive figure is more than three times the initial offering amount of USD200 million.
The Bureau of the Treasury (BTr) conducted a rate setting auction, establishing a competitive coupon rate of 5.75 percent for the newly issued 5.5-year dollar-denominated bonds.
The overwhelming response from investors was evident, with total bids reaching USD636.2 million. Consequently, the auction committee made the decision to accept bids significantly exceeding the initial offering.
The offer period for RDB2 is scheduled from September 27 to October 6, unless terminated earlier by the BTr. These RDBs are fixed-income instruments issued by the national government, renowned for their low-risk, affordability, and convenience.
This offering is part of the government’s broader strategy to diversify investment portfolios and foster financial inclusion among Filipinos. The initial investment for RDB2 is set at USD200, with additional investments accepted in multiples of USD100. This contrasts starkly with the traditional Republic of the Philippines (ROP) bond, which requires a minimum investment of USD200,000.
Sharon P. Almanza, Officer-in-Charge of BTr, emphasized the benefits of offering US dollar-denominated instruments to retail investors, stating, “Retail investors, especially our overseas Filipino community, are not only guaranteed a safeguard from potential FX (foreign exchange) risks but more importantly, an opportunity to maintain the value of their hard-earned USD savings.” Almanza also highlighted the government’s commitment to assume the final withholding tax on interest for RDBs, ensuring investors enjoy the full benefits of their investment.
Finance Secretary Benjamin E. Diokno underscored the significance of RDB2 in achieving financial inclusion, particularly for overseas Filipino workers. He expressed, “With your investments, we manifest a better life for our families, communities, and the nation at large.”
To facilitate investments in RDB2, the public has the option of using various channels, including traditional over-the-counter subscriptions through authorized selling agents and the Bureau of the Treasury’s Online Ordering Facility via www.treasury.gov.ph. Additionally, mobile banking apps such as Bonds.PH, Land Bank of the Philippines (Landbank) MBA, and the Overseas Filipino Bank MBA can be utilized.
The Development Bank of the Philippines and Landbank served as Joint Lead Issue Managers for the RDB 2, while several prominent financial institutions, including BDO Capital & Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, First Metro Investment Corporation, PNB Capital and Investment Corporation, SB Capital Investment Corporation, and Union Bank of the Philippines, were Joint Issue Managers.
In response to the successful offering, Michael Ricafort, Chief Economist at Rizal Commercial Banking Corporation, noted the potential for the government to raise more than USD1 billion from this issuance. He pointed out that the bids significantly exceeded the initial guidance of USD200 million and emphasized the attractive premium over comparable US government benchmarks, designed to entice more investors.
