Finance Secretary Carlos G. Dominguez III urged small investors to invest in the government’s maiden onshore retail dollar bond (RDBs) offering, saying it is a “win-win proposition” that will promote financial inclusion while raising funds for the country’s coronavirus response.
Dominguez said the RDBs and the digital innovations put in place to make investing easier and more convenient, will allow Filipinos, especially overseas Filipino workers (OFWs), to buy government securities without having to pay out “huge commissions to brokers and traders.”
These digital innovations include the Bonds.PH, the mobile applications of the Overseas Filipino Bank (OFBank) and Land Bank of the Philippines (LandBank), and the Treasury's Online Ordering Facility.
Bond offerings such as the RDBs will also support the development of the domestic capital markets, Dominguez said.
“The Retail Dollar Bonds will offer our small investors an outlet for diversifying their investment portfolios. They do not need to keep their dollar holdings in deposit accounts that pay minimal interest,” Dominguez said.
“With a minimum investment of just 300 US dollars or about 15,000 pesos, small investors can now grow their US (United States) dollar savings,” he added.
The finance chief said shifting the buying and selling of government-issued bonds online has made investing in them “seamless and nearly friction-free.”
To enable investors to learn and understand the fundraising and debt management activities of the national government, the Bureau of the Treasury (BTr) also launched a mobile application for the public to access information about them.
“I encourage our people to invest their savings in dollar bonds. This is a win-win proposition. Retail dollar bonds provide a safe investment and income opportunity. Buying them will help raise funds for our economic investments and the nation’s comprehensive effort to defeat the pandemic,” Dominguez said.
The bonds issued by the BTr also “open up the financial system to small investors and encourages more efficient intermediation,” he added.
“Overall, this aids in restoring the vigor of the Philippine economy at the soonest possible time,” Dominguez said.
Earlier, the BTr said it has teamed up with the country’s leading banks to let small investors buy the RDBs at easy terms.
National Treasurer Rosalia de Leon said several banks have agreed to set the minimum initial deposit and average daily maintaining balance requirement to zero for those who would want to purchase these US dollar-denominated securities.
This plan to democratize dollar-bond investing means that banks would do away with their current practice of requiring depositors to open dollar accounts with a minimum balance of $500 to $1,000 before being able to invest in the RDBs.
The RDBs will be the first onshore US dollar-denominated bonds to be issued by the BTr in amounts of as low as $300.