Investors snap up retail dollar bonds; BTr raises $611.2M

MANILA  -The Bureau of the Treasury (BTr) raised an initial $611.2 million from the auction of the second-tranche US-dollar denominated retail Treasury bonds (RTB), which is more than three times the minimum target amount of $200 million that was announced on Monday.

A coupon rate of 5.75 percent was set for the 5.5-year debt paper dubbed “Retail Dollar Bond 2” or RBD2. It will be issued this coming Oct. 11 and mature on April 11, 2029.

BTr officer in charge Sharon Almanza said during the launching program that the second outing for the RDB follows the issuance last February of the 29th tranche of peso-denominated RTB.

Almanza said the success of RTB 29, which was also made available to overseas-based Filipinos in 61 countries, paved the way for the return of RDB2.

“The issuance of RDB2 is better than before as we strive for this product to be more accessible” to retail investors, she said.

The RDB debuted in 2021, from which the government raised about $1.6 billion.

READ: Retail dollar bonds open investment opportunities

At the RDB2 auction on Wednesday, the BTr offered $636 million worth of RDB2 while eligible dealers of government securities tendered a total of $636.2 million.

In a statement, Finance Secretary Benjamin Diokno said the launch of RDB2 was a result of efforts that started last January when the Marcos administration’s economic team kicked off an international roadshow that involved a financial literacy campaign for overseas-based Filipinos.

Diokno said a total of 700 Filipinos attended the financial literacy sessions, conducted during visits to Singapore, the United States, Germany, the United Kingdom, Canada, Qatar and the United Arab Emirates.

“RDB2 is also an important tool to promote financial inclusion” among our countrymen by way of three initiatives, the finance chief said.

Minimum investment

First, the minimum investment amount was lowered to $300 for the maiden RDB to $200 or the peso equivalent for RDB2.

Second, the government is shouldering the final withholding tax on interest “so that investors can fully enjoy the benefits of their investments.”

However, this applies to investors who will use their US dollars. Those who will buy RDB2 through authorized selling agents will pay fees.

Third, the Treasury is again using digital platforms to enable transactions without going to bank branches.

This may be done through BTr’s online selling platforms, as well as the respective mobile applications of Landbank of the Philippines, Union Bank of the Philippines and Overseas Filipino Bank.

The authorized selling agents include BDO Capital and Investment Corp., Bank of the Philippine Islands, China Banking Corp., Development Bank of the Philippines, First Metro Investment Corp., The Hongkong and Shanghai Banking Corp., Metropolitan Bank and Trust Co., Philippine National Bank, Security Bank Corp., Land Bank of the Philippines and Union Bank of the Philippines.