Gov't plans to issue retail dollar bonds for OFWs 

The government plans to raise more funds through the issuance of retail dollar bonds (RDBs) to local investors, particularly overseas Filipino workers (OFWs), according to a report by Philippine Star.

Department of Finance Secretary Benjamin Diokno said the government is looking at another dollar-denominated issuance following the success of its first global bond offer last week.

“We are planning to issue retail dollar bonds this time around, maybe before the end of the year or early next year,” Diokno told reporters.

“We don’t know yet (how much). But that will be a new one for our OFWs,” he said.

If it pushes through, this will be the first RDB issuance for the Marcos administration and the second for the country after the maiden issuance in September last year under the Duterte government.

In that first issuance, the government managed to raise $866.2 million from its original program of $400 million for five-year and 10-year RDBs.

“This is for the OFWs and it’s very easy, with just $100 you can already buy (RDBs) using your e-wallet,” Diokno said.

He said this could already be the last dollar-denominated issuance for the year, adding that the government has no plans to issue bonds via other currencies.

RDBs are part of the government’s program to make government securities available to retail investors, especially individuals.

Apart from raising funds for the country’s priority projects, RDBs are issued to diversify funding sources of the government, as well as promote financial literacy and inclusion among Filipinos.

It also targets to develop the domestic capital market through the provision of a low-risk investment with more competitive yields than term deposits.

Meanwhile, as interest rates continue to pick up with the central bank adjusting to the aggressive moves of the US Federal Reserve, Diokno said such has already been anticipated by monetary officials.

“Right now, it’s 4.25 percent. When we cut interest rates to historic levels of two percent, we are expecting that it will go up at some point,” Diokno said.

“We are used to higher interest rates,” he said.

Further, Diokno dismissed assumptions that the Philippine peso could depreciate to as low as 65 to a dollar.

“It will not reach 65, that’s my prediction. Don’t believe them, otherwise you’ll get burned,” he said.

Last Monday, the Philippine peso hit its 12th all-time low after closing at P59:$1. During the last trading day on Friday, the peso slightly appreciated and closed at 58.92.

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