Finance Secretary Carlos Dominguez III said Friday the Philippines’ first-ever onshore issuance of Retail Dollar Bonds (RDBs) will bring the Duterte presidency closer to fulfilling its twin goals of deepening the domestic capital markets and broadening financial inclusion.
The RDB issuance and other earlier retail bond offerings, made possible through the use of digital platforms, also help improve financial literacy among Filipinos, Dominguez said.
He said the RDBs’ “groundbreaking success” is a “testament to our local and overseas investors’ trust and confidence in the solid fundamentals of the Philippine economy and the Duterte administration’s fiscal prudence.”
Retail bond offerings such as the RDBs offer small investors not only the opportunity to avail of secure investments, but also to support the financing needs of the country, especially at this time of the pandemic, Dominguez said.
“This is far more worthy than gaining interest in their savings that they can otherwise earn from other investment sources. It is because of bond offerings such as this one that we have been able to raise funds for our economic investments and COVID-19 response measures,” Dominguez said during the settlement and listing of the RDBs in the Philippine Dealing and Exchange Corp. (PDEx) held this morning at the Bureau of the Treasury (BTR)’s main office at the Ayuntamiento de Manila.
Dominguez said the RDB listing marks “a critical milestone” and “a moment of pride” for the country, as “the issuance supports the development of our capital markets and helps fulfill President Duterte’s goal of financial inclusion among Filipinos.”
He said the skillful execution of the government’s financing program by the BTr under National Treasurer Rosalia de Leon has allowed small investors to buy RDBs for just a minimum of US$300 or about P15,000, which they can increase by minimum increments of US$100 or P5,000.
“We have now successfully opened another channel to encourage more Filipinos to place their savings in secure investment opportunities. Making investments in government securities easy and convenient contributes to our efforts to expand financial literacy among Filipinos. We will continuously introduce more innovative ways in future issuances to ensure that we create a more inclusive government securities market,” Dominguez said.
Dominguez cited the ease and convenience of investing in RDBs through online investment platforms such as the Bonds.PH mobile application, the mobile applications (apps) of the Overseas Filipino Bank (OFBank) and the Land Bank of the Philippines (LandBank); and the BTr’s Online Ordering Facility.
Through these digital platforms, Filipinos from more than 30 countries were able to buy RDBs, Dominguez said.
The BTr also launched its own mobile app that let investors learn and understand the fundraising and debt management activities of the national government and better inform the public about the Duterte administration’s efforts to use modern digital technologies in encouraging the participation of ordinary Filipinos in bond investments.
Dominguez noted the “very robust response” to the RDB issuance as shown by the US$1.59 billion raised by the Treasury from the sale, which is almost four times its initial target of US$400 million.
The BTr’s web- and mobile app-based investment channels yielded 520 transactions, which raised a total of US$810,000.
This amount translates into an average placement of around US$1,500 per online transaction.