Finance Secretary Carlos Dominguez III is buying small-denomination Retail Treasury Bonds (RTBs) online for his six grandchildren to instill in them the value of saving while, at the same time, encouraging them to invest in building a more vibrant future for their generation.
Dominguez said the government’s auction this week of its first set of RTBs for the year should encourage Filipinos, especially the millennials, to invest their extra cash or savings in RTBs, more so now that they have an even easier way of buying the bonds for as low as P5,000 apiece because the Bureau of the Treasury (BTr) has made these available for purchase online.
“We want this to benefit the small savers and overseas Filipinos,” said Dominguez during a recent Department of Finance (DOF) executive committee (Execom) meeting, as he noted that the annual interest rate offered by the BTr for the five-year RTBs was a historic high of 6.25 percent.
This means that a minimum investment of P5,000 would yield P1,250 over a five-year period, while an investment of P100,000 would yield P25,000–or a lot bigger return for the would-be investor when compared to putting his or her money in a regular bank savings account.
“I’m buying for my six grandchildren,” Dominguez said during the Execom meeting.
His eldest grandchild is 22, while two are 13 years old, one is 11 and the youngest two are nine years old.
National Treasurer Rosalia De Leon said during the same Execom meeting that the bond issuance has generated “a lot of support from small investors, particularly with the online system even getting as low as the minimum of P5,000 for those who wanted to grab RTBs.”
Those interested in investing in the RTBs have only up to March 8 to buy them either online at the BTr website http://treasury.gov.ph, or through banks offering these bonds. A potential investor has to have an existing Philippine peso account at the bank where the RTBs are to be bought.
For online investors, the RTB electronic ordering platform is available to those with peso accounts with the Land Bank of the Philippines (LandBank) or the Development Bank of the Philippines (DBP).
Retail treasury bonds are among the safest, most affordable and most reliable investments available for everyone in terms of credit risk as these are issued by the government and offer a fixed quarterly interest income. RTBs are also tradable and negotiable.
The BTr successfully raised an initial P113.8 billion during the primary auction last Feb. 26 of the five-year RTBs. Strong market demand saw the auction more than four times oversubscribed as total tenders reached P121.8 billion.
According to the BTr, its offering was subsequently expanded from the initial P30 billion on offer to take advantage of the favorable rate and healthy market appetite.
Besides helping raise funds for the government’s accelerated spending program for social services and the “Build, Build, Build” infrastructure program, RTBs also help promote financial literacy among Filipinos.
“The resounding success of our RTB issuances highlights the increasing awareness of Filipinos on investment opportunities that do not only help them realize their personal goals, but also allow them to directly partake in building our nation,” said De Leon in an earlier statement.
De Leon said introducing the RTB ordering platform for the first time online will further expand the BTr’s reach to individual investors by making investment in RTBs easily accessible.
“Through financial technology, we are also allowing overseas Filipino workers (OFWs) to participate in our RTB offering even if they are miles away from home,” said De Leon.
The DBP and LandBank are the Joint Lead Issue Managers for this RTB offering. They are joined by Banco De Oro (BDO) Capital & Investment Corp., Bank of the Philippine Island (BPI) Capital Corp., China Bank Capital Corp., First Metro Investment Corporation (FMIC), Rizal Commercial Banking Corp. (RCBC) Capital Corp., and SB Capital Investment Corp. as Joint Issue Managers.
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