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Saturday, December 2, 2023

Gov’t expects to raise over $1b from 2nd retail dollar bond sale

The Philippine government expects to raise more than $1 billion in its second offering of retail onshore dollar bonds (RDBs) on higher demand from investors, National Treasurer officer-in-charge Sharon Almanza said over the weekend.

“We are seeing demand close to $1 billion… We are confident that we can raise more than $1 billion,” Almanza said.

Finance Secretary Benjamin Diokno said the demand was already close to a billion dollars as of Sept. 29, but the amount could still increase considering the two-week offering. The issue date was scheduled on Oct. 11, 2023, subject to the discretion of the Bureau of the Treasury.

“There is a high demand, so we will give chances to those who want to invest,” Diokno said.

The second RDB offering has a tenor of 5.5 years and a gross interest rate of 5.750 percent per annum payable every quarter until its maturity in 2029. A total of $611.2 million was raised during the auction on Wednesday, which was three times oversubscribed from the initial target of $200 million.

The first retail dollar bond auction was held in 2021 during the administration of President Rodrigo Duterte that raised $1.593 billion.

Diokno encouraged Filipinos around the world to invest in the second RDBs to bolster financial inclusion.

“I highly encourage all of you to invest in RDB 2. This investment product is a big leap towards achieving financial inclusion for our citizens, especially our foreign exchange-earning Overseas Filipino Workers,” he said.

The RDBs’ features include the lowered minimum investment amount from $300 to just $200, and in multiples of $100 thereafter.

The national government issues RDBs, which are fixed-income instruments, to provide Filipinos with low-risk, affordable and convenient investments to diversify their portfolios.

The government has been conducting financial literacy sessions since January to ensure the success of the RDB offerings. Diokno said they hosted these sessions with over 700 overseas Filipinos across Europe, Japan, America, Canada and the Middle East.

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