The Bureau of the Treasury will sell “prize” bonds in ticket multiples of P500 in December that will give individual investors a chance to win as much as P1 million in cash.
On the sidelines of Tuesday’s treasury bond auction, National Treasurer Rosalia V. de Leon told reporters that the mechanics for the upcoming prize bonds issuance would be finalized in the first week of November so they could launch it by the middle of next month.
The Treasury is looking at offering the one-year prize bonds to individuals, associations and cooperatives within a three-week period ahead of Christmas Day, De Leon said.
Prize or lottery bonds give the holder a chance to win a monthly drawing for a tax-free cash prize as these do not pay interest, but only encourage saving.
De Leon said this would be similar to the “premyo savings bond” offered in the 1970s.
But unlike those bond wherein the entire yield went to the raffle, the new prize bonds to be offered by the Treasury will have some part set aside for the bigger winnings on top of the coupon payments.
The prizes would range from as low as P20,000 to a maximum of P1 million, De Leon said.
“You don’t get the full coupon, but you’ll have the opportunity to get higher earnings coming out of your investment for as low as P500. And unlike other cash prizes, you’ll get back your principal. So the principal will be protected—at the end of one year, you can redeem the P500. So you’re not throwing away any good money at all,” De Leon explained.
The prize bonds will have quarterly coupon payments and quarterly draws, she added.
“Instead of giving your godchildren P500 cash, you can give them this investment—they can still redeem it after one year and they have the opportunity for that higher return,” according to De Leon.
The bonds may be purchased online through state-run lenders Development Bank of the Philippines and Land Bank of the Philippines, which will also tap other local private banks as selling agents.