How to invest in Retail Treasury Bonds (RTB) in the Philippines

The Landbank of the Philippines posted in their Facebook Page about Retail Treasury Bonds for as low as 5000 pesos.

What are Retail Treasury Bonds?

The Philippine Retail Treasury Bond (RTB) is a direct and unconditional obligation of the Philippine government generally considered a safe and liquid investment opportunity. The RTB, issuedby the Bureau of Treasury (hence the name), is one way for the government to raise needed funds.

It is safe because it is fully backed by the government and rarely does a government, including the Philippines, defaults on a debt security such as this. It is liquid because it can be traded in the secondary market prior to maturity.

It is called Retail because at Php5,000 (US$112) minimum investment, even individuals can invest here. (Read the whole article at Pinoy Money Talk)

Benefits of Retail Treasury Bonds

  • zero-risk. They are direct, unconditional and general obligations of the Republic of the Philippines (“ROP“).
  • higher-yielding. Interest rate is superior to other investments.
  • They are available for as low as P5,000 investment (during the Public Offering).
  • Pay frequent cash flows. Interest payments will be made quarterly.
  • Liquid. They can easily be bought and sold in the secondary market through the Selling Agents subject to minimum requirements and market rates. (Read the whole article at ThinkPesos)

How to invest in Retail Treasury Bonds (RTBs) in 3 simple steps?

Step 1: Go to your nearest bank and ask if they offer RTBs

Ideally, you would want to go through your local bank where you already have an existing savings account.  This will make it easier for you to transfer funds when you “buy” the bonds, and receive your annual “interest” earnings.  If you don’t have an existing account with the bank, they will ask you to open one.  🙂

Step 2: Fill-up the forms and have it notarized

There’s quite a number of forms to be filled up so just take your time. There’s also one document which needs to be notarized to make it legally binding.  In essence, this document tells you that the government “owes” you money for the duration of the term and obligated to pay you “interest” based on the “coupon rate”.

Step 3: Pay and wait for the interest to be credited through your bank account.

The payment will be debited from the bank account you provided in step 1 so it is important that you have enough funds in your account.  Once paid, all you have to do is wait for the interest to be credited to your account (usually) every quarter until the maturity date.  Once the bond matures, the principal will be returned to you and credited to your bank account. (Read the whole article at AkoSiAllan)

Visit treasury.gov.ph for more information about Retail Treasury Bonds.

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