Finance Secretary Benjamin Diokno is calling on every Filipino to support the growth of the country’s economy under the new leadership by investing in the government’s latest retail treasury bonds (RTBs) offering.
“I invite you all to invest in the 28th tranche of our retail treasury bonds. Your investment is a direct contribution to the development of a truly inclusive, broad-based, and sustainable Philippine economy,” said Secretary Diokno during the virtual launch of the bond offering last August 23.
RTBs are low-risk, fixed-term investments issued by the Republic of the Philippines through the Bureau of Treasury (BTr). Compared to the current interest rates in bank savings accounts and regular time deposits, bonds offer a higher-yield investment instrument, giving ordinary individuals a chance to earn and secure a better future for themselves.
“This issuance serves as an important component of the national government’s fund-raising efforts to finance our development programs that are aimed at building a sustainable, inclusive, and broad-based economy,” the secretary continued.
According to finance experts, investing in RTBs is safe and low-risk because they are a direct obligation of the government. But just like any other investment, they are also affected by risk and opportunity costs.
RTBs as a tool for promoting financial inclusion and literacy
The 28th tranche of the retail treasury bonds, or “RTB-28,” is being offered by the Bureau of the Treasury through the state-owned Land Bank of the Philippines from August 23 to September 2, 2022. Its goal is to help raise funds for the government and to promote financial inclusion and literacy among Filipinos.
“[T]hese relatively higher-yielding government securities strengthen financial inclusion and encourage broader participation in the capital market,” said Secretary Diokno while adding that retail treasury bonds are safe, low-risk, and affordable investment instruments.
With just a minimum investment of P5,000, investors in retail treasury bonds can already grow their hard-earned savings with better returns while contributing to nation-building.
According to BTr, retail treasury bonds have since been the strongest-performing financial instrument in the Treasury’s portfolio of bond offerings.
Since the first issuance in 2001, the government has already raised over P4.37 trillion from these offerings.
PH retail sector as a pillar of domestic financing
Secretary Diokno said that the country’s continuously growing retail sector is one major proof that retail treasury bonds are a viable pillar of domestic financing.
With their consistently strong reception from both local and overseas investors, the retail treasury bonds now account for about 35 percent of BTr’s outstanding government securities. Around 73 percent of the government’s financing was also drawn from domestic sources between 2016 to 2021.
For this year, the government is aiming to raise P2.2 trillion to enable the economy’s strong and resilient growth. To insulate the country from foreign exchange volatilities due to ongoing global uncertainties, the government is planning to obtain 75 percent (about P1.65 trillion) from domestic markets while pursuing a prudent debt management strategy.
The government has already raised an estimated P741 billion in the first half of this year alone.
Use of digital platforms key to achieve growth targets
According to Secretary Diokno, the use of digital platforms is also key to achieving the government’s targets and bolstering investor appreciation for government securities.
The BTr has recently proved successful in using digital tools such as Bonds.PH app, the Overseas Filipino Bank Mobile Banking app, the LANDBANK iAccess, and the Treasury’s Online Ordering Facility, as these have helped broaden access to the securities market and made investing more accessible and convenient for retail investors.
The Treasury has also launched a mobile application called “FiLi,” which gives first-time investors a better understanding of investing and financial planning. Secretary Diokno said the government will continue to develop these kinds of platforms while harnessing current technologies like blockchain to strengthen the efficiency of the government’s securities market.