The Bureau of the Treasury (BTr) of the Philippines has teamed up with the country’s leading banks to let small investors buy at easy terms retail dollar bonds (RDBs) that the government is planning to issue this year to fulfill part of its domestic financing requirements for 2021.
In a report to Finance Secretary Carlos Dominguez III, the BTr said several banks have expressed support for its issuance of RDBs, and agreed to set the minimum initial deposit and average daily maintaining balance requirement to zero for those who would want to purchase these US dollar-denominated securities.
The issuance of RDBs is part of the government’s efforts to diversify sources for funding its operations and is in keeping with President Rodrigo Duterte’s goal of financial inclusion for all Filipinos.
This plan to democratize dollar-bond investing means that banks would do away with their current practice of requiring depositors to open dollar accounts with a minimum balance of USD500 to USD1,000 before being able to invest in the RDBs.
The RDBs will be the first onshore United States (US) dollar-denominated bonds to be issued by the BTr in amounts as low as USD300, National Treasurer Rosalia De Leon said.
De Leon said the RDBs “will provide small investors a tool to diversify their investment portfolio aside from the usual Peso Retail Treasury Bonds (RTBs) and Premyo Bonds.”
“We are planning to make the RDBs available to individual investors at a minimum amount of only USD300, significantly lower than the minimum amount for investing in traditional Philippines’ US dollar-denominated bonds of USD200,000,” de Leon said in her report.