It’s better late than never.
The Bureau of the Treasury (BTr) has finally announced its plan to issue a new 2.5-year Retail Treasury Bond (RTB) maturing in 2029. Soon to be assigned the series name RTB 02-01, the bond will raise at least PHP 30 billion, the BTr said.
However, we expect the total amount to reach PHP 150 to 200 billion, at an indicative coupon range of 6.875% to 7.125%.
Is there an opportunity for investors here? Let’s dive in.
The auction will be held on September 29, 2026, and a public offer period will run on the same day until October 7, 2026, with the possibility of BTr ending it much earlier.
During the same period, holders of RTB 15-01, FXTN 20-13, FXTN 03-30, RTB 15-02, and RTB 05-15 may also submit their intent to exchange their outstanding bonds for the new RTB 02-01. The table below lists the repurchase prices for the eligible bonds.
Based on a settlement date of October 12, 2026, coinciding with the issuance of RTB 02-01
Since the beginning of the US-Iran conflict, local bond yields have risen by roughly 200 basis points (bps) across the curve. Concerns about the war’s impact on global oil supply and inflation have kept volatility elevated, prompting investors to favor shorter- and medium-term securities over longer-duration bonds. With our indicative range of 6.875% to 7.125%, we consider the RTB 02-01 attractive given its short tenor and favorable risk-return profile.
The Bangko Sentral ng Pilipinas (BSP) also forecasts inflation to slow to 5.4% in 2027, while Metrobank Research expects policy rates to return to 4.75% by 2027, driven by potential de-escalation in the Middle East and stability in oil prices. A 2.5-year tenor is long enough to give investors a chance to lock in elevated yields before a possible retreat in policy rates.
As to the BTr's bond exchange program, FXTN 20-13 will be exchanged at a gross yield of 5.41%, roughly 9 bps lower than the current market bid yield. This makes the BTr’s exchange more favorable. We recommend that holders of FXTN 20-13 participate in the bond exchange program.
However, to fully realize the value of their current holdings, we believe that holders of RTB 15-01, FXTN 03-30, RTB 15-02, and RTB 05-15 should NOT participate in the bond exchange. With exchange yields around 12 to 50 bps above prevailing market bid levels, investors may be better off selling their holdings in the secondary market and reinvesting the proceeds into RTB 02-01 through the regular public offering.
We expect the issuance size to be much smaller than previous RTB offerings, since the BTr is on track to achieve its 2026 borrowing target and can raise funding in the rest of this year’s weekly FXTN auctions. Thus, investors are encouraged to submit orders as early as possible.
The first day is Tuesday, September 29. Investors interested in participating in the coupon-setting may submit bids in the morning, while the public offer period begins in the afternoon once the coupon is set.
You may reach out to your branch of account, Wealth Specialist, or Relationship Manager to learn more about how to participate in this new 2.5-year RTB primary issuance and bond exchange offer.
EARL ANDREW “EA” AGUIRRE is the Head of the Investment Counselor Department under the Financial Markets Sector of Metrobank. He has more than a decade of experience in foreign exchange, fixed income securities, and derivatives sales. He has a Master’s in Business Administration from the Ateneo Graduate School of Business. His interests include regularly traveling to Japan and learning its language and culture.
