Gov’t plans more ‘Premyo’ Bonds

Published January 5, 2020, 12:00 AM

by manilabulletin_admin


The national government is planning to regularly offer prize bonds or the “Premyo” Bonds following the strong demand from retail investors who were attracted by how the debt notes were structured, the Department of Finance (DOF) said.

Finance Secretary Carlos G. Dominguez III said that prize bonds issuance now forms part of the Duterte administration’s financing strategy as it is also aligned with the government’s goal of encouraging Filipinos to get into the habit of saving and investing.

Premyo Bonds, which took the form of a mix of a saving program using bonds, and a lottery, sold ₱4.961 billion from the first-time sale last month, or 65 percent higher than the initial issue size of ₱3 billion.

The three-week-long offer period of Premyo Bonds was met with strong demand from the investing public, including individuals and eligible institutions that make investments on behalf of their individual members.

Dubbed “Invest Pa More, Panalo Pa More Premyo Bonds Para Sa Bayan,” the prize bond float received wide participation among small savers and overseas Filipino workers with its offer of cash and other rewards on top of income from a fixed-rate investment.

“In advanced economies, the capital markets are as deep-rooted as the economy is inclusive. Regardless of what their day jobs are, ordinary citizens help drive up the savings and investment rates by participating in financial products,” Dominguez said.

What the government wants is to see Filipinos or that “the man-on-the-street is involved in market decisions that make the economy what it is.”

National Treasurer Rosalia de Leon said the Premyo Bonds were particularly intended to build on the momentum from the recent issuances of Retail Treasury Bonds, in which the government saw an increasing trend of participation from individual investors.

“By designing the Premyo Bonds to include a cash and non-cash reward mechanic, our aim was to entice more individuals and institutions to directly invest in government securities,” De Leon said.

“By way of a proactive financial literacy campaign and enhancing access via over-the-counter and online channels, we hope to promote financial inclusion by educating investors not only about the economics of smart investing, but also about our individual roles as Filipinos,” she added.

The use of both onsite and online purchasing platforms enhanced the ease of access to Premyo Bonds.

Of all online transactions, more than 44 percent were investments of ₱5,000 and below, indicating that the Premyo Bonds successfully reached retail investors.