MANILA, Philippines — The government will lower the minimum investment needed as it moves to issue the first Retail Dollar Bonds (RDBs) under the Marcos administration in a bid to secure more financing.
In its financial literacy session with overseas Filipino workers (OFWs) in Frankfurt, Germany Sunday evening, the economic team encouraged migrant workers to invest in various government securities.
The session is part of the Europe leg of the Philippine Economic Briefing this week.
Finance Secretary Benjamin Diokno said the government is preparing for the first RDB issuance of the Marcos administration. RDBs are part of the government’s program to make government securities available to retail investors, especially individuals.
“Government securities are ideal investment vehicles because they are safe, secure, accessible and support nation building,” Diokno said.
This will be the second RDB for the Philippines after the maiden issuance in September 2021 under the Duterte administration.
Development Bank of the Philippines first vice president Francis Chua said the government has decided to lower the minimum investment to $200 from $300 during the first issuance.
Chua noted that RDBs are backed up by the financial capacity of the country to pay with interests being settled quarterly.
“The interests are also higher than what you are getting in your bank account and even time deposit,” Chua said.
“We are currently conducting information sessions and still finalizing the different platforms which you can invest in. The issuance will be sometime in April,” he said.
During the first RDB, issuance rates settled at 1.375 percent as interests globally were low amid the pandemic.
But since last year, interest rates have been on an uptrend following high inflation and monetary policy tightening both on the global and domestic fronts.
During the recent global bond sale of the Philippines at the start of the year, yield stood at 4.343 percent.
“Most likely within that range also plus a slight premium to be more attractive to retail investors and open the opportunity for them to invest in high yielding securities,” Chua said.
Apart from raising funds for the country’s priority projects, RDBs are issued to diversify funding sources of the government, as well as promote financial literacy and inclusion among Filipinos.
It also targets to develop the domestic capital market via the provision of a low-risk investment with competitive yields than term deposits.