Treasury bureau to float first retail dollar bonds


The national government plans to issue its first retail dollar bonds (RDBs) next month in order to tap into the greenback holdings of Filipinos abroad.


In preparation for the anticipated RDB, the Philippine Embassy in the United States of America (USA) and the Bureau of the Treasury (BTr) organized an online financial literacy workshop for Filipinos in the US on Thursday.


According to a statement released by the BTr on Thursday, RDBs are USD-denominated instruments with a structure similar to the government’s retail treasury bond program.


The RDBs will allow small and mid-sized investors to deploy their resources and earn while contributing to the government’s recovery and resilience projects, it noted.


RDBs will be offered for as little as $300, the bureau added, making them far more accessible than the government’s ordinary US dollar bonds, which need a minimum subscription of $200,000.


“Aside from relatively higher returns, the RDBs will particularly appeal to USD (US dollar) earners as the structure mitigates foreign exchange risk on the part of investors by maintaining the original currency of their investment,” it continued.


In addition, the national government will assume the withholding tax on interest income, allowing investors to earn the full amount of interest on their principal.


“We would like to increase investors’ capacity to further diversify their investments by offering US-dollar denominated instruments that can match the natural cash flows, especially by Filipinos in the USA,” National Treasurer Rosalia de Leon said during the event.


She went on to remark that the government’s investment channels will make opening bank accounts and investing in RDBs easier for Filipinos living overseas.


De Leon said the projected RDBs are part of the government’s P3-trillion borrowing program, this year, which is higher than the P2.74-trillion overall funding for 2020.


The most recent government figures revealed that its overall borrowings increased by 23.88 percent to P1.76 trillion in the first five months of 2021, compared to P1.42 trillion in the same period of 2020.


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