Philippines generates $866.2 million from maiden onshore retail dollar bond offering

The Philippines on Wednesday generated $866.2 million from its maiden onshore retail dollar bonds (RDB) offering, which seeks to democratize the bond investing market and open it to more local investors.

Data released by the Bureau of the Treasury (BTr) showed that $551.8 million was awarded for the five-year bonds maturing in 2026, priced at 2.25%, and $314.4 million for the ten-year bonds maturing in 2031 priced at 1.375%.

The RDBs are the first onshore dollar-denominated bonds issued by the BTr, with a minimum investment of $300 or P15,000.

“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,” Finance Secretary Carlos Dominguez III said in a separate statement.

The government introduced two accounts for investors in the instrument: the straight US Dollar, and the PesoClear options.

The BTr said local lenders agreed to set the minimum initial deposit and average daily maintaining balance requirement to zero for prospective investors.

“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,” said Dominguez.

The Philippine debt is projected at P11.73 trillion this year, equivalent to a 16-year high debt-to-GDP ratio of 59%. This is then projected to climb to 60.8% next year. — BM, GMA News