Finance Secretary Carlos Dominguez III encouraged small investors on Wednesday to invest in the country’s first-ever onshore retail dollar bonds, saying they are a “win-win proposition” that will promote financial inclusion while raising funds for economic investments and comprehensive effort to recover from the pandemic.
Dominguez said the newly-launched RDBs of the Bureau of the Treasury and the digital innovations put in place to make investing in them easier and more convenient would allow Filipinos, especially overseas Filipino workers, to buy government securities without having to pay out “huge commissions to brokers and traders.”
These digital innovations include the Bonds.PH, the mobile applications of the Overseas Filipino Bank and Land Bank of the Philippines and the Treasury’s Online Ordering Facility, he said.
Bond offerings such as the RDBs will also support the development of the domestic capital markets, Dominguez said.
“The retail dollar bonds will offer our small investors an outlet for diversifying their investment portfolios. They do not need to keep their dollar holdings in deposit accounts that pay minimal interest. With a minimum investment of just $300 or about P15,000, small investors can now grow their US dollar savings,” Dominguez said at the virtual launching of the RDBs.
He said shifting the buying and selling of government-issued bonds online made investing in them “seamless and nearly friction-free.”
“I encourage our people to invest their savings in dollar bonds. This is a win-win proposition. Retail dollar bonds provide a safe investment and income opportunity. Buying them will help raise funds for our economic investments and the nation’s comprehensive effort to defeat the pandemic,” Dominguez said.
The Treasury teamed up with the country’s leading banks to let small investors buy the RDBs at easy terms.
National Treasurer Rosalia de Leon said several banks agreed to set the minimum initial deposit and average daily maintaining balance requirement to zero for those who would want to purchase the US dollar-denominated securities.
The plan to democratize dollar-bond investing means that banks would do away with the current practice of requiring depositors to open dollar accounts with a minimum balance of $500 to $1,000.
The RDBs will be the first onshore US dollar-denominated bonds to be issued by the Treasury in amounts of as low as $300.
De Leon said that to offer the RDBs to the widest investor base possible, the Treasury introduced two accounts for people to invest in this instrument—the straight US Dollar and PesoClear options.