Just in time for the expected influx of cash this holiday season, the Philippine government is selling five-year Retail Treasury Bonds (RTBs) that will pay an annual interest rate of 4.625 percent to take advantage of the greater demand for the government security.
For a minimum investment of Php5,000, Filipinos who have a peso account with the banks accredited as selling agents of the RTBs may avail of the offering from Monday, November 20 until Wednesday, November 29. The RTBs will mature in 2022.
Anyone investing at least Php5,000 on the RTBs will earn Php185 net of taxes a year, in contrast to the Php40 that bank deposits yield each years, according to the Bureau of Treasury’s online calculator.
This is the government’s third RTB offering under the Duterte administration and the issue with the highest annual interest rate in the past two years.
In April, the government successfully raised Php181.9 billion from its three-year RTBs with a 4.25-percent annual interest rate. In September 2016, the Bureau of Treasury also sold RTBs that are set for maturity by 2026, which carried an annual interest rate of 3.5 percent. It raised Php100 billion during the offering.
The RTBs have become a regular and stable financing option of the government to raise capital for its projects. But for National Treasurer Rosalia V. De Leon, it has also become the government’s way of raising awareness about the different viable and affordable investment options available to the public.
In fact, the current RTB offering was timed especially for the holiday season to encourage Filipinos to give the gift of investment this Christmas instead of the usual material presents.
“For the 20th offering of retail treasury bonds, we are taking advantage of the added liquidity in the market leading up to the Christmas season,” De Leon said. “We also know that many Filipinos will have a ‘spend’ mindset during these times, so we want to present them with an investment option that will have multiple returns to them.”
The Development Bank of the Philippines and Land Bank of the Philippines serve as the Joint Lead Issue Managers for this 20th RTB offering. They are joined by BDO Capital & Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, First Metro Investment Corporation and SB Capital Investment Corporation as Joint Issue Managers.
This article was corrected on November 21, 2017 to clarify that the interest rate is 4.625 percent. The original version of the article mistakenly stated that the interest rate was 4.65. We deeply regret the error.
Elyssa Christine Lopez is Entrepreneur.com.ph’s staff writer.