THE Bureau of Treasury (BTr) bids a 4.375 percent annual interest rate for investors of this year’s Retail Treasury Bond (RTB) offer which seeks to raise funds for government projects.
On Wednesday, January 29, BTr held the public offering of the RTB’s 23rd tranche (RTB 23) to potential investors in Davao City.
The selling of the bond began on January 28 and will close on February 6, 2020, with a minimum investment of P5,000.
The RTB 23 will be issued on February 11, 2020, and matures on February 11, 2023.
BTr deputy secretary Erwin D. Sta. Ana explained the 4.375 percent interest rate will be paid to the investors quarterly during the term of the bond and is subject to the 20 percent final withholding except for tax-exempt institutions.
“Just like any investments, there is a return. You expect a fixed return over the life of the bond of 4.375 percent gross income per annum and is subject to the current 20% final withholding tax. The net of tax that would be what the investors will receive on a quarterly basis,” he said.
Since 2001, RTB has become a yearly fundraising mechanism of the national government through investments of private individuals, corporations, cooperatives, and other small investors.
In a BTr briefer, RTBs are “designed to be a low-risk, higher-yielding, and affordable savings instrument. They are considered credit risk-free/default-free because they are direct, unconditional, and general obligations of the Republic of the Philippines. These are higher-yielding compared to the savings account and are affordable.”
BTr deputy treasurer Erwin D. Sta. Ana explained during his speech that the amounts raised through the RTBs are used by the national government in funding its social services and infrastructure programs as well as promote financial literacy among the public.
He said 75 percent of the 4.1 trillion national budget for 2020 must come from local investors.
“You will help fund social services in the 2020 budget. P1.495 trillion will be used for social services, education, free college education, the 4Ps (Pantawid Pamilyang Pilipino Program), [and] the conditional cash transfers. These are the vital components of the social services that are funding this year,” he said.
“And of course, the P972.5 billion this year will fund infrastructure. And 75 percent of this funding requirement will have to come from the local market,” he added.
He said they are confident to raise its target amount of P30 billion after the success of the Premyo Bonds which they launched late 2019.
He said the Premyo Bonds have garnered a total of P4.961 billion for a minimum denomination of P500 from 20,000 investors.
“We expect the same level of success for this RTB that is why we are aggressively promoting it to the countryside,” Sta. Ana said adding that RTB 23 has already raised P134 billion during the first day of its offering, January 28.
He added the bonds can be availed through accredited issuer banks via walk-in or through the BTr website.
The issuer banks include the Development Bank of the Philippines (DBP), LandBank of the Philippines (Landbank), Banco de Oro (BDO) Capital and Investment Corporation, Bank of the Philippine Islands (BPI) Capital Corporation, China Bank Capital Corporation, First Metro Investment Corporation (FMIC), Philippine National Bank (PNB) Capital and Investment Corporation, Rizal Commercial Banking Corporation (RCBC) Capital Corporation, and Security Bank (SB) Capital Investment Corporations.
“We urge everyone to consider investing in retail treasury bonds, for its 23rd tranche. So again, we say that this is a very affordable and convenient and safe investment outlet for everyone. We expect the support of all Filipinos and spread financial literacy in the country,” he said.