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The Aquino government will issue the first retail treasury bonds (RTBs) under its fiscal watch on August 10 with a minimum size of P25 billion.

The bonds will be divided into P10 billion each of tenors of five years and seven years, and P5 billion of 10 years.

The government will not be issuing three-year bonds in keeping with its new policy of issuing debt papers with longer maturities.

The banks said they are just awaiting word from the finance department and national treasury for a possible float of up to P100 billion RTBs.

National Treasurer Roberto Tan said the government is sticking to the range of P25 billion to P30 billion as offer size.

"We’re not looking at that amount (P100 billion)," Tan said at the sidelines of the formal signing of the agreement between the arranger banks and the government.

Tan said the record sales of the RTBs in the past show strong public preference for such type of debt issue among the targeted small investors looking for decent returns.

He said since the first RTB launch in 2001 of P15 billion, the size has been growing, with sales of P114 billion in 2009.

Next week’s sale will be the 12th since the RTBs’ introduction.

The national government had raised of P550 billion from the previous 11 offerings.

Tan said they expect the new RTB issuance to be "a resounding success."

He said the government may have to tweak its borrowing program in the future in accordance with the results of the RTB offering.

Finance Secretary Cesar Purisima said the market would determine how far the new RTBs could be sold, but ruled out the banks’ proposed P100 billion.

Purisima said the Aquino government’s first foray into the local capital market looks "favorable", noting the recent peaceful transfer of power and the high ratings of President Aquino.

The government decided offer a new supply of RTBs amid maturing debt papers.

A total of P75.23 billion in three- and five-year RTBs will be maturing in August and September.

Of the total, P36.47 billion in three-year RTBs already matured on August 1 while P38.76 billion of five-year RTBs will mated on September 8.

The government sold a record P114 billion RTBs last year with tenors of three and seven years. The previous record was P77.7 billion set in 2007.

The government likewise floated multicurrency RTBs worth $500 million last April this year aimed at overseas Filipino workers (OFWs) and their families.

Of the total sale of OFW RTBs, $400 million was dollar-denominated and $100 million was in euro. - Dennis Gadil

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