The Bangko Sentral ng Pilipinas (BSP) lauds the National Government’s first-ever issuance of retail dollar bonds (RDBs), which provide investment opportunities to small investors like overseas Filipinos and which are seen to provide various benefits for the economy.
Last September 15, the Bureau of the Treasury (BTr) sold a total of USD 866.2 million worth of onshore RDBs from the maiden issuance—more than twice the originally programmed USD 400 million—amid high demand. Proceeds will help augment the government’s resources for pandemic response.
RDBs are accessible to small investors, as these require a minimum investment of only USD 300.
As such, BSP Governor Benjamin E. Diokno said, the RDB issuance supports financial inclusion, which is a major agenda of the central bank.
“Retail Dollar Bonds provide a special opportunity for small and mid-sized investors to earn and, at the same time, help fund the government’s recovery and resiliency programs,” Governor Diokno said in a speech during the recent launch of the RDBs.
“[RDBs] could be particularly attractive to our overseas Filipinos who have funds to invest. This bodes well for them and their families,” the Governor added.
Governor Diokno said various BSP initiatives implemented over the years have helped make investing in securities like RDBs much easier. He cited regulations that eased process of opening bank accounts, such as use of electronic Know-Your-Customer verification process; liberalization of foreign exchange rules that facilitate transactions of banks, overseas Filipinos, small- and medium-sized enterprises, and the general public; and promotion of financial digitalization.
He noted that individual investors can buy RDBs through e-banking apps and they can transfer funds to their bank accounts seamlessly through PESONet or InstaPay.
The Governor also cited BSP policies, including inflation targeting and foreign exchange reforms, that help keep a relatively stable peso, which in turn helps ensure that any rise in foreign exchange inflows do not significantly impact inflation.
Meantime, the Governor said the government’s pandemic response mixes well with the BSP’s own efforts toward recovery.
“These funds [from RDB issuance] will serve as additional source for stimulative fiscal policy which, together with the current accommodative monetary policy, will remain crucial in restoring confidence and reviving domestic demand. Taken together, these initiatives will help the national government fight the adverse effects of the pandemic through targeted fiscal interventions, which are aimed at boosting market confidence and safely reopening more sectors of the economy,” Diokno said.
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Source: Bangko Sentral ng Pilipinas (BSP)