The Department of Finance launched the country’s first mobile application that can allow investors to purchase five-year retail treasury bonds (RTBs) and redeem investments through electronic payment channels using a smartphone. The government is aiming to attract small investors and holders of previously-issued RTBs to swap their holdings for the new issue.
The RTBs are called “Progreso” or “Progreso Bonds” which are offered to small investors the mobile app and through bank’s online portals and branches, and in multiples of ₱5,000. The new RTB offer fetched a coupon rate of 2.625% at an auction at the Bureau of the Treasury, with the government awarding 192.7 billion pesos ($3.89 billion) worth of the paper against total tenders of 278.6 billion pesos.
The proceeds of this government initiative will be used to fund programs that will aid sectors badly hit by the pandemic and the administration’s flagship program “Build, Build, Build”.
It can be noted that the country has been ramping up borrowing, seeking to raise more money to mitigate the economic impact of the COVID-19 pandemic and offset a slide in revenues due to lockdowns and business shutdowns.
National Treasurer Rosalia de Leon said in an interview:
“The pandemic will not stop our lofty pursuit...to empower every Filipino to contribute to putting the economy back to a trajectory of sustained high growth.”
The RTBs will be offered until August 7. Meanwhile, RTBs maturing in August this year and March 2021 can swap their holdings for the 2025 RTBs, allowing the government to lengthen the maturity of some of its debt obligations.
Image from Department Of Finance Facebook Page
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