TREASURY CONFIDENT OF GOOD RECEPTION
By VG Cabuag
Reporter
THE Bureau of Treasury will hold a road show in several parts of the country this week to promote and sell its remaining retail treasury bonds, a debt paper meant for both the general public and the institutional buyers.
The road show, which starts Tuesday through December 4, will cover Cebu, Davao and the whole of Luzon, National Treasurer Omar Cruz said Monday after the auction of the five-year RTBs.
“We want to (hold) the roadshow to build up and size up the interest of the market (on the RTBs),” Cruz said, adding that the measure would also build up the books of the BTr after some of its debt instruments have already matured or will mature by end of the year.
In the auction, the BTr raised P6 billion from its five-year debt instruments, which fetched a coupon rate of 5.875 percent. Although it received tenders that reached P9.8 billion, Cruz said yesterday’s rate was lower compared to the 7.5 percent rate that it fetched when the same debt instrument was offered last year.
One of the reasons for the decline was the easing up of the country’s inflation rates, Cruz said.
It plans to sell P14-billion debt papers during the roadshow.
Cruz is optimistic that they would receive good reception among the buyers, especially from the banks which have a lot of money as a result of, among others, the maturing debt papers that they hold.
In July, he said, the BTr paid about P38 billion of its maturing debt papers and in December, it will again shell out P32 billion, or a total of P70 billion in fresh funds going into the banking system that would have to be reinvested somewhere.
“With that ‘hang-up’ of funds, what will be their (banks’) investment alternative, savings or time deposit?” Cruz said.
The P6-billion RTBs are part of the P20 billion that the government plans to sell this year. Half of those funds were supposed to be offered to the institutional buyers and the remaining to the general public.
In previous years, however, when the BTr offers the debt instrument, most of the RTBs were just gobbled up by the institutional buyers and only a handful by the general public, as there were not enough information to generate interest.
This time, Cruz said they will sell the debt paper, with the rate of 5.875 percent, through its 11 selling agents.
These are Allied Banking Corp., Banco de Oro Universal Bank, BDO Capital, Deutsche Bank, Development Bank of the Philippines, Equitable PCIBank, First Metro Investment, Land Bank of the Philippines, Metropolitan Bank and Trust Corp., Multinational Investment Bank and Rizal Commercial Banking Corp.
Business Mirror
November 28, 2006
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