Lend At Least P5,000 To Duterte Gov’t For 3 Years And Earn 4.25% P.A. Higher Than Savings, Time Deposits
The Philippine government is selling three-year Retail
Treasury Bonds (RTBs) that will pay an annual interest rate of 4.25 percent in
a bid to encourage regular bank depositors to diversify to higher-yielding
investment instruments with a longer holding period.
For a minimum of Php5,000, Philippine residents with a bank
account can buy the RTBs and effectively lend money for three years to the
government, which will pay the annual interest in quarterly installments
between April 2017 and April 2020.
After three years, the government will return the principal
to the RTB holder.
According to the Bureau of Treasury, the first step for
interested investors is to inquire at your bank of choice if they are offering
the RTBs.
If the bank offers the bonds, the next step is to accomplish
the necessary forms, provide the other required documents and have the
documents notarized.
The payment for the bonds is rather easy because it will be
automatically deducted from your bank account.
Similarly, the quarterly interest earnings for the bonds
will also be automatically credited to your bank account.
Those without deposit accounts must first open one with the
bank of their choice.
Interested investors have only until April 6, 2017 to buy
the RTBs, according to the Bureau of Treasury, which began offering the bonds
last March 28.
Investor interest in the RTBs is quite high.
Banks who participated in the auction to set the bond’s
coupon rate last March 28 offered to buy up to Php70 billion of the bonds, more
than double the Php30 billion initially set by the government.
The banks are reselling the bonds to the public.
The government regularly sells bonds to raise money to
finance its operations and infrastructure projects, but the ongoing RTB
offering is special because it was designed to appeal to small individual
savers and encourage them to start investing in long-term instruments.
“We want more Filipinos to get into the habit of investing,
and become more financially aware of how their money could work harder for
them,” National Treasurer Rosalia de Leon said in a statement.
The new three-year RTB’s coupon of 4.25 percent rate is
higher than 3.5-percent yield on the first RTBs offered under the Duterte
administration in September 2016, which had a longer maturity of 10 years or
until September 2026.
The new RTB also pays more than the average rate of 3.12
percent for time deposits of more than one year in February, based on data from
the Bangko Sentral ng Pilipinas.
Some corporate bonds with a three-year tenor also pay a
coupon rate of only four percent, according to data from the Philippine Dealing
System.
Many corporate bonds also require higher minimum investment
placements of at least Php50,000 and pay interest only twice a year.
First Metro Investment Corp. and Land Bank of the
Philippines serve as the joint lead issue managers for this round of RTBs.
BDO Capital & Investment Corp., BPI Capital Corp.,
Development Bank of the Philippines, China Bank Capital Corp. and SB Capital
Corp. are the joint issue managers.
The RTBs will be available through any of the 17 qualified
selling agents: BDO Universal Bank, BDO Capital & Investment Corp., BPI
Capital Corp., China Banking Corp., Citibank, CTBC Bank (Philippines) Corp.,
Development Bank of the Philippines, First Metro Investment Corp., ING Bank,
Land Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine Bank
of Communications, Philippine National Bank, Rizal Commercial Banking Corp.,
Security Bank Corp., Standard Chartered Bank and United Coconut Planters Bank.
Source: Entrepreneur Philippines
Lend At Least P5,000 To Duterte Gov’t For 3 Years And Earn 4.25% P.A. Higher Than Savings, Time Deposits
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March 31, 2017
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