Caveat, this is not a paid advertisement. But rather, another investment option for every Juan.
Support our country’s recovery by lending to the Philippine government via the Progreso Bonds. Offer period started July 16 and will end in August 7. Maturity period (or get your money back) after 5 years, while enjoying annual interest of 2.625% paid out quarterly. You can buy it via Bonds.PH app. But fret not, if you miss this offering, our country via the Bureau of Treasury issues Retail Treasury Bonds (RTBs) from time to time.
Recap: What are RTBs?
RTBs are low risk investments that are “direct and unconditional obligations” by the Republic of the Philippines (ROP). In short, guaranteed by the Philippine government, it will not default and it will deliver the promised return. It is also open to the retail investors (those with lower capital) given minimum investment amount of P5,000. They offer higher rates than usual time deposits, and they are liquid — they may be bought and sold in the secondary market and authorized selling agents. Note that interest return is still subject to income tax. Read the following to know more about RTBs:
RTB-24 Progreso Bonds
- Offer Period: July 16 to August 7, 2020
- Issue Date: August 12, 2020
- Minimum Investment: P5,000, multiples of P5,000 thereafter
- Maturity: 5 years from issue date (August 12, 2025)
- Interest Rate: 2.625% per annum
- Interest Payment: Quarterly, subject to 20% income tax
- Negotiability: Negotiable and transferable
- Where to Buy: (1) Order via www.treasury.gov.ph; (2) Order online via DBP, Chinabank, Landbank, First Metro Securities; (3) Via Bonds.ph App (more about this new app below)
The previous issues usually get sold out quickly because of the very low risk nature, and well, higher returns compared to an ordinary time deposit. but in the greater scheme of things, there are many other investment options that can give us higher returns, but for higher risk of course. More recent ones are preferred shares (example: Petron Preferred Shares) and corporate bonds (example: Ayala Land 2-year Bonds). These are not guaranteed by the government but are dependent on the financial capacity of the issuing company (in this example Petron and Ayala Land).
Another option that’s easier to understand is the higher rates given by simple savings accounts. Digital banks such as CIMB and ING can actually give you much higher promotional rates at 3.5% to 4% without the 5-year lock-in period. There’s no telling though for how long CIMB and ING will be offering these higher rates, but for the RTB, the interest rate is locked-in until maturity, and of course, we’re helping the government.
Buy RTBs via Bonds.ph App
Back to RTBs.
Traditionally, RTBs may be bought from participating banks, but usually as well, either the RTBs get sold out quickly, or the process is tedious with too much documentation. Or you end up buying in the secondary market. Now, another channel has been opened to make investments on RTBs more accessible and easier to the investing public — via the Bonds.PH app powered by UnionBank (PSE: UBP) in partnership with PDAX.
Download the app at Apple Store or Google play and create an account. Upload an ID, take a selfie and have your account verified. Once verified, you can actually buy RTB 24 (while supplies last and during offer period). Future RTB offerings will be made available in the app too so I suggest you download now even if you’re not buying yet, just so you can check the RTB offerings from time to time! With just a few clicks, you can actually invest in RTBs anytime, anywhere.
The app is newly launched though so some users find some birthpains in using the app, but hopefully the user experience improves over time. To pay for your bonds and to add cash to your Bonds.ph account, the following are the cash-in channels (click links to know more):
See sample screenshots from the app.
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Images from treasury.gov.ph and Bonds PH app of Google Play