MANILA, JULY 23, 2007
(STAR)  By Iris C. Gonzales - The government was able to raise P18.77 billion from the sale of its three-year and five-year retail Treasury bonds (RTBs) yesterday after the debt papers both fetched attractive rates.

This developed as the Bureau of the Treasury (BTr) said it was canceling the July 30 auction for P6 billion worth of Treasury bills (T-bills) to give way to its RTB offering. The July 30 T-bill auction would have raised P6 billion for the government.

The three-year retail Treasury bond fetched a coupon rate of 6.875 percent in yesterday’s auction. The BTr sold P9.283 billion worth of the debt paper, with total tenders reaching P9.383 billion.

For the five-year retail Treasury bond, the rate was at 7.125 percent. The BTr sold P9.488 billion worth of the five-year paper.

Originally, the government was eyeing to sell at least P8 billion worth of RTBs although issue manager First Metro Investment Corp. said the sale could reach P40 billion.

Finance Undersecretary and acting

National Treasurer Roberto Tan said the government is pleased with the results of the auction. Tan said the government expects to raise more money from the sale of the retail Treasury bonds to small investors until July 31.

“We’re very happy with the results. We’re glad that the market has been responsive and we’re looking forward to generating more volume in the next few days until the end of the offer period,” Tan told reporters after yesterday’s auction.

The offer period is until July 31, with the issue date set on Aug. 1 but Tan said the BTr has the option to cut this if it would be able to attract enough investors early on.

“We have the option to cut the offer period,” he noted.

First Metro executive vice-president Roberto Dispo expressed confidence that the government would be able to sell at least P40 billion worth of RTBs at the end of the offer period.

“We’re very confident that the market will respond positively and that we would be able to raise at least P40 billion,” he told reporters.

First Metro and BPI Capital Corp. are the joint issuers and joint issue coordinators of the government for this transaction.

This is the first time this year that the government again issued RTBs following a disappointing issuance last year when the market snubbed an offering amounting to P20 billion.

The issuance of RTBs is part of the government’s savings mobilization program designed to make government securities available to retail investors and at the same time create savings consciousness among Filipinos.

With RTBs, investors can buy the debt paper for a minimum amount of P5,000.

The government is raising funds to plug its yawning budget deficit which hit P41 billion in the first semester of the year, higher than the programmed P31 billion deficit target for the period.

For this year, the government hopes to trim the budget shortfall to P63 billion although Socioeconomic Planning Secretary Romulo Neri believes that the deficit could reach P100 billion this year.

The finance department is sticking to the target as it hopes to sell this year the government’s stake in San Miguel Corp. worth P50 billion and Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC), also worth P50 billion.

Chief News Editor: Sol Jose Vanzi

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