|
THE
government is again eyeing the impact of thousands of
individual investors and their money in the hope of
attracting cheap funds under a proposed retail Treasury
bond (RTB) sale in July.
The
proposed issuance was eyed to replace a batch of
maturing RTBs during the month, Finance Undersecretary
and acting Treasury chief Roberto Tan said on Tuesday.
“We are
looking at it, more to provide supply than to meet our
revenue needs,” Tan told reporters.
He would
not be specific on the timing and magnitude of the sale,
saying only that RTBs worth P33 billion were to mature
in July.
The
planned RTB sale underscores the importance not just of
the mood of thousands of individual investors willing to
put their money in the hands of government, but also of
the role by the domestic interest rate environment.
Tan said
the opportunity for selling RTBs might have presented
itself again given that domestic interest rates have
started moving up.
In
August last year, when the government last sold RTBs,
they were pleasantly surprised at the magnitude of the
demand that eventually allowed them to sell a total of
P77.6 billion.
They
expected to sell only half of what was actually sold
during the offer period.
“It
could prove attractive at this time because domestic
interest rates are again moving up,” Tan said.
He had
to resort to the negotiated sale of government
securities as investors increasingly tendered high bid
rates on each sale of Treasury bills and bonds,
prompting the Bangko Sentral ng Pilipinas (BSP) to
question at one point the propriety of raising public
money via negotiation rather than through an auction
process, as mandated.
Tan was
having a difficult time raising short-term money for the
Treasury because higher-yielding special deposit
accounts were being offered by the BSP at that time.
If not
for the P6 billion worth of assets sold in the first
quarter, Tan might have a more difficult time filling up
the national coffers.
Others,
however, including the BSP and those in the private
sector, began to question the alleged lack of
transparency in the negotiated sale of securities.
Tan has
defended the integrity of the process and the fact that
legislation permits the Bureau of Treasury to resort to
it as and when required.
“Who
says we are not allowed to sell government securities on
negotiated basis?” Tan once asked. |
