THE Bureau of the Treasury (BTr) has raised P4.961 billion from the first-time sale of Premyo Bonds, or over 65 percent higher than the initial issue size of P3 billion.
The three-week-long offer period of Premyo Bonds was met with remarkably strong demand from the investing public, including individuals and eligible institutions who make investments on behalf of their individual members, according to the BTr.
“In advanced economies, the capital markets are as deep rooted as the economy is inclusive,” said Finance Secretary Carlos Dominguez III about the issuance. “Regardless of what their day jobs are, ordinary citizens help drive up the savings and investment rates by participating in financial products. The man-on-the-street is involved in market decisions that make the economy what it is.”
Dominguez pointed out that this type of bond float now forms part of the government’s proactive financing strategy and supports President Rodrigo Duterte’s goal of financial inclusion for all Filipinos.
Dubbed “Invest Pa More, Panalo Pa More Premyo Bonds Para Sa Bayan,” this prize bond float received wide participation among small savers and overseas Filipino workers with its offer of cash and other rewards on top of income from a safe investment, the BTr said.
The use of both onsite and online purchasing platforms enhanced the ease of access. Of all online transactions, more than 44 percent were investments of P5,000 and below, indicating that the Premyo Bonds successfully reached retail investors.
Those who purchased the Premyo Bonds will earn three percent per annum to be paid quarterly for one year.
For a minimum investment of only P500, investors have a chance to win up to P1 million every quarter. Non-cash rewards in the form of condo units and a house and lot will also be given away.
Winners will receive these rewards net of all applicable taxes, fees and charges.
Many opened bank accounts
Investors who were previously unbanked, without access to financial services and vulnerable to predatory lending practices, opened bank deposit accounts to participate in the Premyo Bonds.
The BTr said that as of Dec. 13, 2019, more than 1,700 new bank accounts were opened. This partial figure indicates how the Premyo Bonds and similar products can contribute to financial inclusion in the country by encouraging unbanked Filipinos to start saving and investing.
Because of the good reception of Premyo Bonds, the issue size was increased from the initial P3 billion to close to P5 billion, and the total prize pool was likewise increased from the initial P3 million to P4.5 million to be raffled off quarterly.
Instead of one winner of P1 million, 10 winners of P100,000 and 50 winners of P20,000, there will be more winners— one winner of P1 million, 15 winners of P100,000 and 100 winners of P20,000 per quarter. From 61 winners, there will now be a total of 116 winners per draw.
“The Premyo Bonds were intended to build on the momentum from the recent issuances of retail treasury bonds, in which we saw an increasing trend of participation from individual investors. By designing the Premyo Bonds to include a cash and non-cash reward mechanic, our aim was to entice more individuals and institutions to directly invest in government securities,” said National Treasurer Rosalia de Leon.
“By way of a proactive financial literacy campaign and enhancing access via over-the-counter and online channels, we hope to promote financial inclusion by educating investors not only about the economics of smart investing, but also about our individual roles as Filipinos in contributing to nation building by participating in government securities,” de Leon said.
Proceeds from the Premyo Bonds, which are now part of the National Government’s proactive financing strategy, will help fund the country’s health and educational programs, among others. (PR)