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The government plans to sell retail dollar bonds to overseas Filipino workers to raise more funds for infrastructure projects and COVID-19 response efforts, the Bureau of the Treasury said in a report by Manila Standard.
National Treasurer Rosalia de Leon said in an online briefing the government was finalizing the details of the offering.
The Bureau of the Treasury held its first webinar and financial literacy briefing in relation to the planned RDB offering. It was aimed to raise awareness on the advantages of investing on RDBs.
RDBs are US dollar-denominated instruments that will be similar in structure to the retail treasury bonds of the Treasury.
De Leon said RDBs would allow small- and mid-sized investors to mobilize their savings and earn while helping fund the government’s recovery and resilience program.
RDBs are set to be offered at a minimum placement of $300, making it more accessible than the traditional US dollar bonds issued by the Republic which require a minimum subscription of $200,000.
Aside from relatively higher returns, RDBs will particularly appeal to US dollar earners as the structure mitigates foreign exchange risks on the part of investors by maintaining the original currency of their investment.
The national government will also assume the withholding tax on interest income, allowing investors to earn full interest on their principal.
The webinar also discussed the convenient subscription options open to investors. Aside from the over-the-counter transactions, the Treasury is looking to continue its digital push and explore the suitability of previous online channels such as online ordering platform, Bonds.PH and the Overseas Filipino Bank mobile banking application.
The government sold last month $3 billion worth of 10.5-year and 25-year US-dollar denominated bonds. It followed the issuance of $2.75-billion dual-tranche global bonds in December 2020 and the 2.1 billion euros triple tranche in April 2021.
Finance Secretary Carlos Dominguez III earlier said the success of the issuances showed the firm confidence of investors on the solid macroeconomic fundamentals of the country.