2008-07-19 10:31:40 - Coupon rate of the three-year retail treasury bond (RTB) stood at 8.5 percent while that of the five-year paper at nine percent during the price setting of the Bureau of Treasury (BTr) Friday wherein it sold a total of P9.12 billion debt paper.

By Joann Villanueva

MANILA

www.balitapinoy.net

3-yr, 5-yr RTB rates up, BTR sells P9.12B

Average rate of the three-year paper stood at 8.43 percent, its highest at 8.50 percent while lowest at 8.25 percent.

For the five year paper, its average rate stood at 8.887 from a high of nine percent and low of 8.70 percent.

National Treasurer Roberto Tan told reporters after the auction

that coupon rate of the three-year RTB went up by 200 basis points compared to its rate last year while that of the five-year bond increased by 39.2 percent.

He attributed the increase to the 50 basis points hike in the central bank policy rate Thursday which brought the borrowing rate at 5.75 percent while lending rate went up to 7.75 percent.

Tan, however, said the rates are 'reasonable', thus, it is 'good for the small savers.'

RTB takers are usually small investors since its minimum capital is P5,000.

Tan said they see huge demand for the paper as proven during the day's rate setting.

'We expected good demand for this issue,' he added.

BTr's offering for the three-year instrument was set at P4 billion but total tenders almost tripled after it reached P11.299 billion.

However, the auction committee only accepted P4.443 billion.

Also, tenders for the five-year notes was almost triple the offering of P4 billion after it amounted to P11.116 billion but BTr only accepted P4.681 billion.

Tan said the volume of bids came from investors who were waiting for the rate to go up and cash in more instead of getting other debt instruments like Treasury bond (T-bond) and Treasury bills (T-bills).

BTr has tapped Development Bank of the Philippines (DBP), BPI Capital and First Metro Investment Corp. as sellers of the debt instrument.

A road show will be conducted by the BTr in Davao, Cebu and Cagayan de Oro next week to further increase awareness of the RTB sale.
(Balita Pinoy - Philippine News & Analysis)