Diokno: Retail dollar bonds ideal for OFW investments
MANILA, Philippines—The national government’s maiden retail dollar bond issue will provide investment opportunities to small investors like overseas Filipinos workers who will, in turn, cascade those benefits to the rest of the economy.
The Bangko Sentral ng Pilipinas (BSP) said this after the recent sale by the Bureau of the Treasury of $866.2 million worth of onshore retail dollar bonds—more than twice the originally programmed $400 million—due to strong market demand.
Proceeds from the borrowing will help augment the government’s resources for pandemic response.
Retail dollar bonds are available to small investors, requiring a minimum investment of only $300.
In a statement, BSP Governor Benjamin Diokno said the bond issue supports financial inclusion, which is a major agenda of the central bank.
“Retail dollar bonds provide a special opportunity for small and midsized investors to earn and, at the same time, help fund the government’s recovery and resiliency programs,” he said at a speech during the recent launch of the securities.
The bonds, Diokno said, “could be particularly attractive to our overseas Filipinos who have funds to invest. This bodes well for them and their families.”
Diokno said various BSP initiatives implemented over the years have helped make investing in securities, like retail bonds, easier, citing regulations that eased process of opening bank accounts, like:
- Use of electronic know-your-customer verification process
- Liberalization of foreign exchange rules that facilitate transactions of banks, overseas Filipinos, small-and-medium-scale enterprises and the general public
- Promotion of financial digitalization
He said individual investors can buy retail dollar bonds through e-banking apps and transfer funds to their bank accounts seamlessly through PESONet or Instapay.
The central bank chief also cited the agency’s policies, including inflation targeting and foreign exchange reforms, that help keep a relatively stable peso, which in turn helps ensure that any rise in foreign exchange inflows does not significantly impact inflation.
Diokno also said the government’s pandemic response goes hand in hand with the BSP’s own efforts toward recovery.
“These funds [from bond issue] will serve as additional source for stimulative fiscal policy which, together with the current accommodative monetary policy, will remain crucial in restoring confidence and reviving domestic demand,” he said.
“Taken together, these initiatives will help the national government fight the adverse effects of the pandemic through targeted fiscal interventions, which are aimed at boosting market confidence and safely reopening more sectors of the economy,” he added.
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