Wednesday, November 29, 2023

BTr teams up with leading banks to offer retail dollar bonds

The Bureau of the Treasury (BTr) has teamed up with the country’s leading banks to offer small investors easy access to retail dollar bonds (RDBs) that the government plans to issue this year to meet part of its domestic financing needs through 2021, according to the Department of Finance (DoF).


In a statement on Monday, the DoF quoted the Treasury as saying in a report  that several banks have expressed support for the issuance of RDBs, and have agreed to set the minimum initial deposit and average daily maintaining balance requirements to zero for those who would like to purchase these United States dollar-denominated securities.


The issuing of RDBs is part of the government’s efforts to diversify funding sources for its operations, the bureau said, and is in line with the goal of financial inclusion for all Filipinos.


This idea to democratize dollar-bond investing would mean that banks would stop do away with their current practice of requiring depositors to open dollar accounts with a minimum amount of $500 to $1,000 before they could invest in RDBs, it also pointed out.


National Treasurer Rosalia de Leon said the RDBs will be the first onshore dollar bonds issued by the BTr in amounts as low as $300.


The RDBs “will provide small investors a tool to diversify their investment portfolio aside from the usual peso retail treasury bonds (RTBs) and premyo (prized) bonds,” she also remarked.


“We are planning to make the RDBs available to individual investors at a minimum amount of only $300, significantly lower than the minimum amount for investing in traditional Philippines’ US dollar-denominated bonds of $200,000.”


Besides offering the RDBs at a small minimum investment amount, de Leon said that access to such bonds will be much easier as these will be available through the Treasury’s Online Ordering Facility, Bonds.PH mobile app, and the Overseas Filipino Bank (OFBank) mobile application.


She went on to say that in order to reach the broadest possible investor base, the bureau will introduce two accounts for people to invest in RDBs: a direct US dollar account and a PesoClear account.

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