Following the success of its “premyo” bonds issuance, the government has almost doubled to 116 the number of winners to be drawn during the quarterly raffle this year, the Department of Finance (DOF) said.
It said that in each of the upcoming quarterly raffle, there would be one winner of P1 million and a house-and-lot or a condominium unit; 15 winners of P100,000 each, and 100 winners of P20,000 each.
A total of P4.5 million in cash—net of all applicable charges, fees and taxes—will be raffled off every quarter, instead of the initial P3-million quarterly prize pool earlier announced by the Bureau of the Treasury.
In December, the Treasury said that there would be one winner of P1 million and a house-and-lot or condominium unit, just 10 winners of P100,000 and only 50 winners of P20,000 per quarter.
The government sold P4.96 billion in one-year “premyo” bonds last month, exceeding the minimum of P3 billion that the Treasury had intended to offer to individuals, associations (such as nonstock and loans associations as well as employee associations), cooperatives, employee retirement funds, provident funds and trust entities (except collective investment schemes or CIS, mutual funds, and UITFs).
National Treasurer Rosalia V. de Leon had said that the government would repeat the “premyo” bond sale this year.
Each bond costing P500 will give investors one entry for each of the quarterly raffle.
Besides the cash and non-cash prizes up for grabs, these securities are also investments and earn 3 percent a year, to be paid quarterly, subject to a 20-percent final tax.
The amount to raised from this debt issuance will augment funding for the government’s priority programs and projects.
Finance Secretary Carlos G. Dominguez III welcomed the strong demand for “premyo” bonds from small investors.
“Regardless of what their day jobs are, ordinary citizens help drive up the savings and investment rates by participating in financial products. The man-on-the-street is involved in market decisions that make the economy what it is,” he said.
This type of bond float now forms part of the government’s proactive financing strategy and supports President Duterte’s goal of financial inclusion for all Filipinos, Dominguez said.
According to the Treasury, more than 44 percent of the online “premyo” bond purchases were investments worth P5,000 and below, an indication that these came from the pockets of retail investors.
The Treasury said that investors who were previously unbanked, without access to financial services and vulnerable to predatory lending practices, opened bank deposit accounts to participate in the “premyo” bonds.
“As of Dec. 13, 2019, more than 1,700 new bank accounts were opened. This partial figure indicates how the ‘premyo’ bonds and similar products can contribute to financial inclusion in the country by encouraging unbanked Filipinos to start saving and investing,” the Treasury said.
More overseas Filipino workers also invested in “premyo” bonds as the Treasury said that orders came from 12 countries outside the Philippines.
Since the “premyo” bonds were made available online through state-run lenders Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank) as well as First Metro Securities Brokerage, the number of online investors rose 13 times and the amount of investments increased six times compared with the previous retail treasury bond (RTB) issuance in March last year, according to the Treasury.
“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 in contributing to nation-building by participating in government securities,” De Leon added.