Government plans to sell retail $ bonds to Pinoys overseas

MANILA, Philippines — The Bureau of the Treasury plans to sell retail dollar bonds (RDBs) to overseas Filipinos next month in an effort to attract migrants to invest in long-term government securities.

In a webinar yesterday, National Treasurer Rosalia de Leon said Filipinos living abroad may buy the RDBs that the government would sell in August.

De Leon said returns from the RDBs may exceed the interest rates of up to 1.4 percent that the US Treasury offers when opening time deposit accounts with banks.

“These RDBs will be earning more than your usual time deposit with your banks. Interest rates right now are low. Looking at US Treasury, it’s about 1.3 percent to 1.4 percent. Similar here with the retail treasury bonds. With this investment, your hard earned money will also be earning more income,” De Leon said.

“This time around, we are offering dollar-denominated bonds to preserve the value of your hard-earned income. Given that, the valuation will be maintained in the US currency,” she said.

De Leon said the RDBs would provide small and medium-scale investors the opportunity to rotate their savings and inject cash in government efforts to recover from the pandemic.

According to de Leon, minimum placement for the RDBs would be set at $300 to make it more accessible than the traditional US dollar bonds of $200,000.

Likewise, the government will assume the payment for the withholding tax on interest income to allow investors to gain full interest on their principal.

De Leon also said the auction for the RDBs would be held in August. The Treasury looks to consult with interested investors first on the details of the issuance.

“The auction will be held sometime in the middle of August, but the benchmark would have to be our existing ROPs that we have already in 2031. Right now, it is changing at 2.07 percent and, at the same time, that’s a tenor of nine years,” de Leon said.

The government eyes to widen the borrowing program to P3.02 trillion this year, from P3 trillion last year, to bankroll its pandemic measures and the vaccination program.

The bulk of the debt will be secured from local sources at P2.58 trillion, while another P442.36 billion will be sought from foreign financiers.