The Department of Finance (DOF) said the Marcos administration is now looking at selling retail dollar bonds in the second-quarter of the year as the government sees strong interest from overseas Filipinos in Europe and Japan.
On the sidelines of the Bankers Night on Friday, Feb. 25, Finance Secretary Benjamin E. Diokno said the government now plans to launch its dollar-denominated retail bonds between April and June, instead of the first-quarter.
Diokno explained that the deferral was due to the recent sale of the 5.5-year retail treasury bonds in the domestic market, which the government raised P283.71 billion.
To recall, Diokno told reporters last November that the Marcos administration would sell its first overseas retail bonds around January to March 2023, and he expects to raise a record $3 billion.
Despite the delay, the finance chief noted that there is still “a lot of interest” from investors, particularly from Filipinos living in London, Frankfurt and Japan.
But Diokno was quick to clarify that the forthcoming retail dollar bond sale is not just for overseas Filipinos.
“The dollar denominated bond is not limited to overseas Filipino workers. Even local investors can participate as long as they have a bank account,” Diokno said.
“It’s a good investment because if the dollar depreciates, you’ll win and it has higher interest plus it’s tax free,” he added.
Retail dollar bonds are government securities that earn fixed interest over the term of the bond and it is offered retail and to individual investors.
In February, the government exceeded its retail treasury bond sale target of P250 billion after raising P283.71 billion.
Of that amount, P162.18 billion was awarded at the rate-setting auction on Feb. 7, while an additional P121.53 billion was raised during the one-week offer period, which include P31.67 billion from a swap offer.
The RTB, with a gross coupon rate of 6.125 percent per annum, was originally set to run from Feb. 7 to 17 but was closed two days earlier than the scheduled closing date.
The RTB was made available for as low as P5,000 through the traditional over- the-counter placement in bank branches.
The issuance of retail bonds has been part of the government’s savings mobilization program designed to make government securities available to retail investors and at the same time create savings consciousness among Filipinos.
The government has been tapping funds from individuals since 2001 and had raised more than P4.8 trillion from the sale of the bonds with denominations as low as P5,000 in the past 22-years.###