Tag Archives: Bureau of Treasury

Treasury launches ‘Premyo’ bonds

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THE BUREAU of the Treasury on Monday launched its one-year peso-denominated “Premyo bonds para sa bayan” (Premyo bonds) as part of its bid to lure more small investors to government securities.

Here, four players can each win up to P1 million in cash or non-cash prizes such as real estate for as low as P500 in investment.

During the bond’s launch yesterday at the Development Bank of the Philippines (DBP), National Treasurer Rosalia V. De Leon announced that three property developers — DoubleDragon Properties Corp., Vista Land and Landscapes, Inc. as well as Megaworld Corp. — have partnered with the government to offer grand prizes during quarterly draws.

Ms. De Leon said the Premyo bonds are designed to encourage Filipinos to save while contributing to nation building, by reducing the minimum investment “to just P500” from the usual floor of P5,000. The Treasury also made it more convenient to invest by providing the option of applying online. Investors can also acquire the bonds through authorized selling agents.

“Premyo Bond, in small ways hopefully, could demonstrate that, if done right, digitalization of finance offers a gateway to achieve significant inroads towards financial inclusion and payments efficiency,” she said in a speech.

In a disclosure yesterday, Doubledragon said one winner will win a P6-million unit at Hotel 101 Fort in Bonifacio Global City in Taguig City in one of the four draws.

“The Premyo Bonds are a great way to incentivize first-time retail bond investors to try out investment instruments like this as a way for them to optimize and diversify their savings. It is also a great way to support our country and help spur inclusive growth,” DoubleDragon Chairman Edgar J. “Injap” Sia II said in the disclosure.

Under its cash reward tier, a total of P3 million will be raffled off during the quarterly draws where one winner will win P1 million, 10 winners to win P100,000 while 50 winners can win P20,000.

“On every cash rewards draw date, each Premyo Bonds unit shall be assigned a 20-character electronic Rewards Number (“e-RN”) using the Cash Rewards application system,” the Treasury said in a notice.

It added that “a bondholder in possession of multiple Premyo Bonds units may win multiple times.”

In a Nov. 22 notice, the Treasury said that the bonds will be in “scripless form” and will have a minimum required investment of P500 and integral multiples of P500 thereafter. The issue has an initial size of P3 billion but the Treasury has the option to upsize.

“The Bureau of the Treasury has the option to upsize, but our target right now is P3 billion and we can still continue the offering and get a higher volume,” Ms. De Leon said during Monday’s launch.

The debt papers carry an interest rate of three percent per annum to be paid quarterly and subject to a 20% final tax.

While there will be no maximum investment, a bondholder can have a maximum of 20,000 Premyo bond units worth P10 million per selling agent to qualify for the rewards scheme.

Eligible investors for the bond issuance includes individuals who have a local bank account, cooperatives, qualified associations such as nonstock and loans associations as well as trust entities, among others.

The bond offer period runs from Nov. 25 to Dec. 13.

“When subscription has reached a level deemed sufficient by the BTr, the BTr shall announce the termination and closure of the offer period through the BTr Web site or in any electronic financial information providers chosen by the BTr,” it said.

Selling agents for the transactions are BDO Unibank, Inc.; BDO Capital and Investment Corp.; Chinabank Corp.; China Bank Capital Corp.; Development Bank of the Philippines; First Metro Investment Corp.; Land Bank of the Philippines and Metropolitan Bank & Trust Co. — Beatrice M. Laforga

Gov’t sells P25-billion worth of initial RTBs

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By CHINO S. LEYCO
August 10, 2010

The government has successfully raised an initial P25 billion Tuesday from the sale of retail Treasury bonds (RTBs) that attracted plenty of interest from small investors looking for steady returns.

The Bureau of Treasury sold P10 billion of 5.875 percent five-year, another P10 billion of 6.625 percent seven-year and P5 billion of 7.25 percent 10-year RTBs at the price-setting auctions for the securities Tuesday.

Total tenders for the five-, seven- and 10-year retail bonds amounted to P26.42 billion, P21.873 billion and P14.86 billion, respectively.

Roberto Juanchito T. Dispo, First Metro Investment Corporation executive vice president, said the government can “easily” triple the volume it sold at Tuesday’s price-setting auction.

Meanwhile, National Treasurer Roberto B. Tan had said the final sale amount from a retail treasury bond issue starting this week will be much less than P100 billion.

Tan also said the government will adjust next quarter’s borrowing program after the retail bonds.

The government has tapped six private and two state-owned banks as its arrangers for the issuance of peso-denominated longer-term IOUs.

The consortium of banks includes BDO Capital and Investment Corporation, BPI Capital Corporation, First Metro Investment Corporation, Metropolitan Bank and Trust Company, Philippine National Bank  and Rizal Commercial Banking Corporation.

The government also hired two state-owned banks namely the Development Bank of the Philippines and Land Bank of the Philippines.

The treasury bureau earlier said it will sell RTBs to finance the P75.23 billion worth of RTBs that will mature in August and September this year.

Tan said that P36.47 billion RTBs sold three-years ago will mature on August 1, and another P38.76 billion debt papers that were sold in 2005 will mature on September 8.

The issuance of RTBs is part of the government’s savings mobilization program designed to make government securities available to retail investors and at the same time create savings consciousness among Filipinos. With RTBs, investors can buy the debt paper for a minimum amount of P5,000.

The government borrows from the local market through the issuance of Treasury bills and bonds to finance its budgetary requirements and to plug its widening budget gap.

The government also borrows from the foreign market through the issuance of global bonds and by tapping loans from multilateral lenders.

The government needs to plug an expected budget gap of P325 billion this year, revised upward from a previous program of P293 billion.