First mobile app for Philippines Treasury retail bonds for small investors

INVESTING ON THE GO - Iggy Go (The Freeman) - July 21, 2020 - 12:00am

Last week, the launching of the Philippines’ first mobile application was done. This will enable small investors to conveniently purchase retail treasury bonds (RTBs) and redeem these investments through electronic payment channels using their smart-phones and other similar devices.

These RTBs, dubbed the PROGRESO Bonds, will be offered to small investors via the mobile app and through banks (over-the-counter or through online banking) in multiples of Php5,000. The PROGRESO bond issuance forms part of the government’s 2020 funding program. The auction of the PROGRESO bonds was set with an annual fixed interest rate of 2.625 percent, payable every quarter, with a maturity date on August 12, 2025.

The launching of the Bonds.PH mobile app was made possible by the Union Bank of the Philippines (UnionBank) in its capacity as Joint Issue Manager and Selling Agent, and in partnership with the Philippine Digital Asset Exchange (PDAX).

It is the 24th RTB issued by the BTr and the seventh under the Duterte administration.

The offer period for the PROGRESO bonds started Thursday (July 16), and will end on Aug. 7, 2020, with the BTr having the discretion to cut the offer period short once it gets sufficient volume from the sale.

Land Bank of the Philippines (LANDBANK), Development Bank of the Philippines (DBP), First Metro Investment Corp. (FMIC), PNB Capital and Investment Corp., Chinabank Capital Corp., SB Capital Investment Corp., RCBC Capital Corp., BDO Capital, BPI Capital Corp., and UnionBank are the issue managers for the PROGRESO bonds.

Switch Offer

Aside from the PROGRESO bond auction, the BTr also announced a “switch” offer that will allow investors of specific bonds maturing in 2020 and 2021 to shift to RTB 24 at no extra cost.

The total outstanding amount of bonds eligible for the switch is about P321 billion.

The BTR’s last RTB issuance was done last February, raising Php250 billion in new money and Php60 billion through “switch” offers for 3-year RTBs.

Simple steps to get started

The Bonds PH app can be downloaded on both Android devices via Google Play and IOS devices via the Apple App Store.

This app can accept an investment for as low as Php5,000 and offers a wide array of electronic payment channels such as Instapay, PESONet, GCash and Paymaya, the BTr said.

The Bonds PH app is completely digital, available 24/7 and accessible to Filipinos from anywhere in the world. For investors purchasing RTBs through the Bonds PH app, the interest from their investments will go directly to their electronic wallet in the app.

You can also redeem their investments through the app even prior to the maturity date.

Why invest in Retail Treasury Bonds?

RTBs are medium to long-term investments that pay higher interest rates than time deposits and are virtually risk and default-free because they are direct, unconditional and general obligations of the Republic of the Philippines.

RTBs offer fixed quarterly interest income compared to other financial instruments.

The BTr is set to hold online briefings for Luzon, Visayas, and Mindanao, as well as targeted briefings for institutional investors such as cooperatives, insurance funds, and other groups targeting small investors to drum up interest for the PROGRESO bonds.

Online briefings for overseas Filipino workers (OFWs) in areas such as New York, San Francisco, Tokyo, Hongkong, Singapore, Middle East, the Caribbean, and Brunei will also be conducted by the BTr for the PROGRESO bonds.

So what are you waiting for? Invest now while also contributing to funding the PH government!

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