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Manila Bulletin devider Business devider Gov't to borrow at least $200-M from Filipino savers

Gov't to borrow at least $200-M from Filipino savers

Published Sep 25, 2023 05:52 am

At A Glance

  • The Bureau of the Treasury is offering Retail Onshore Dollar Bonds (RDBs) as a new investment option for Filipino savers.<br>RDBs are medium- to long-term debt securities issued by the government of the Philippines through the Treasury.<br>They provide a fixed interest rate per annum and guarantee the return of the principal at the end of the term.<br>RDBs aim to make government securities accessible to retail investors as part of a savings mobilization program.<br>The offer includes five-year and 5.5-year bonds, with a minimum target amount of $200 million.<br>The offer period is from Sept. 27 to Oct. 6, 2023.<br>A price setting auction is scheduled for Oct. 11, 2023.

The Bureau of the Treasury is offering a new investment option in US dollars for Filipino savers to help meet the budget needs of the Marcos administration.

The Treasury has posted a notice on its website on Monday, Sept. 25 stating that retail onshore dollar bonds (RDB) will be issued, with a maturity date set for 2029, or after President Marcos' term ends.

This onshore RDB offer, the second of its kind in the Philippines, will include five-year and 5.5-year bonds, targeting a minimum amount of $200 million.

The offer will be available through select banks starting on Wednesday, Sept. 27, and will run until Friday, October 6, 2023.

A price setting auction is also scheduled for Wednesday, with the issue date set for Oct. 11, 2023.

RDBs are a type of government investment that allows individuals to earn fixed interest over a specific period of time and get their initial investment back at the end.

They are part of a program to make government bonds accessible to retail investors.

Last Friday, Finance Secretary Benjamin E. Diokno said the Treasury was expecting to generate an initial $1 billion from this offering, with the possibility of increasing the size if there is high demand.

To attract more investors, the minimum investment requirement for the RDB has been reduced from $300 to $200. 

The Marcos administration faced challenges with the inaugural dollar retail treasury bond sale, which was initially planned for December 2022. 

It was subsequently postponed to the second quarter and then rescheduled again to the third quarter due to unfavorable market conditions.

In September 2021, the Philippines successfully conducted its first retail dollar bond sale, raising approximately $1.6 billion or P80.91 billion.

Meanwhile, Diokno also said the Treasury was aiming to sell Sukuk bonds, which are Islamic bonds, within the period of October to December. 

To attract more investors and promote business in the country, President Marcos' economic managers recently conducted a roadshow and briefings in the Middle East.

Diokno said the objective of the Middle East roadshow was to promote Sukuk bonds.

“These are Islamic issuances that will diversify the government’s sources of financing, widen our investor base, and boost investments in physical and digital connectivity,” the finance chief said.

Former National Treasurer Rosalia V. de Leon earlier said the government's target is to raise $1 billion through Sukuk bonds before the end of 2023 or early the following year. 

Related Tags

government borrowings Bureau of the Treasury
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