Gov’t raises P15B from ‘tokenized’ T-bond debut
MANILA -The Philippine government raised more than it had hoped to borrow during its first ever sale of “tokenized” Treasury bonds (T-bonds), in what it hailed as a “successful” program aimed at helping reach the long-term goal of fostering a financially inclusive domestic debt market.
The government raised P15 billion during Monday’s launch of the tokenized T-bonds, bigger than the P10 billion it had originally planned, the Bureau of the Treasury (BTr) said in a statement.
What allowed the government to upsize the offering was the strong demand for the tokenized securities. Total bids for the T-bonds, which are payable in one year, amounted to P31.43 billion, more than thrice the original size of the issuance.
Tokenized bonds are exchanged digitally through a blockchain or decentralized ledger. According to the BTr, the debt securities were sold in the form of “digital tokens” that will be maintained at the bureau’s distributed ledger.
READ: PH to start selling tokenized Treasury bonds
The tokenized T-bonds fetched a rate of 6.50 percent, aligning with the prevailing rates quoted for the comparable tenor at the secondary market where tokenized debt instruments cannot be traded.
Article continues after this advertisementWhile other well-known use of blockchain technology like cryptocurrencies was met with caution, the tokenization of real assets like debt and equity instruments is seen as a huge step in democratizing financial markets.
Article continues after this advertisement“The bond tokenization program is anchored on the national government’s long-term vision of a financially inclusive domestic capital market,” Finance Secretary Benjamin Diokno said.
“Through streamlining settlement procedures and minimizing friction costs, this initiative is a huge leap towards our end goal of democratizing investment and empowering our small investors,” he added.
The government offered its first-ever tokenized bonds to institutional investors, with the minimum investment set at P10 million, which can be increased in increments of P1 million.
