CLARK FREEPORT – Retail Treasury Bonds (RTBs), which will have only a short three-year maturity period, are now available through different selling agents (SAs) at P5,000 minimum investment after the opening of the public off er period on May 30.
Nanette C. Diaz, Bureau of the Treasury (BTr) director for liability management service, also said the public offer period will last until Friday (June 8) only and the RTBs will be issued on June 13.
On Thursday, Diaz delivered “a message from the issuer” at the RTB Tranche 21 roadshow presentation for clients and investors at the Quest Hotel located inside the Mimosa Plus estate here. RTBs are now available through 17 SAs.
“These are the financial institutions authorized to distribute and sell RTBs government securities,” Diaz said.
“There is a pre-qualification during the auction of government securities to become an eligible dealer,” she explained.
“There are certain eligibility criteria where it is determined who will qualify to sell the RTBs during the auction that was made last Tuesday,” she added.
Diaz said even millennials who want to make a sound investment can start putting their money in RTBs with a minimum investment of P5,000 and in multiples of P5,000 thereafter.
Foreigners are also allowed to invest in RTBs, she added.
“It will be significant,” Diaz said on the funds that will be generated in the public offer of RTBs which will be “funding government expenditures like the Build, Build, Build program of the Duterte administration.”
“RTBs will have a fixed interest rate of 4.875 per annum and the payment of interests will be every quarter,” Diaz said.
They have a higher interest rate as compared to traditional time deposits, she added. Diaz said other objectives of the public off er is to enhance the BTr’s capability to manage its financial needs, demonstrate its prudence and commitment to diverse fund-raising programs, make government securities available to retail investors, and create savings-consciousness among the Filipinos as well as to develop the local capital market by expanding the investor base of government securities.
The benefits to investors include low risk investments.
RTBs are also classified as higher yielding investments that offer fixed quarterly interest income, they are affordable, they pay frequent cash flows to investors and interest payments are made quarterly as compared to the regular Treasury Bonds for which interests is paid semi-annually.
Diaz said RTBs are liquid. It is readily available in the secondary market where it can easily be bought and sold through the SA subject to minimum requirements and market rates.
The basic requirements for investors would be a peso account or a designated existing peso account with the SA where the interest and principal payments will be made; investors must submit to the SA the requirements for purchasing the RTBs (application to purchase, client information sheet), investors must pay the SA the amount due for the RTB purchase, and a “confirmation advice” to be issued by the SA a few days after the issue date.
After the public offering, investors can still buy the RTBs from the secondary market at prevailing market prices.
In case investors have to sell their RTBs prior to maturity, they may sell the RTBs to their SA from which the RTBs were purchased or to other SA subject to prevailing market rates.
Depending on prevailing market rates, at the time of sale, the RTBs may also be traded at a premium on a discount to face value.
The first day of public off er on May 30 held at the DBP auditorium raised P66 billion. Aside from Makati and Pampanga, the RTB Tranche 21 roadshow will also be held in Davao City, Cagayan De Oro, General Santos and Legaspi City among others.
Some P255 billion was raised last December 4, 2017 in the RTB Tranche 20 public offering.
Diaz said the generated funds will be co-mingled with the General Fund.
“We would like to invite everyone to participate in this public offering of the 21st RTB of the government because this investment is really intended for the retail investor and it would also help the government raise funds to support the financing of the Build, Build, Build program,” Diaz said.
