Capital

Heads Up: You Can Earn 2.62% Interest a Year in New Gov't Retail Treasury Bonds

RTBs are one way to help the economy recover.
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Here's one way to support the Philippine economy fight the effects of the COVID-19 pandemic. The Philippine government has relaunched its retail treasury bonds (RTB) to encourage Filipinos to invest and support the economy.

Launched on Thursday, July 16, the “Progreso Bonds” offer 2.625 percent interest rate per year. The maturity date for these bonds is in 2025.

This year’s interest rate is notably lower than last year’s 6.25 percent coupon for five-year RTBs and the 4.375 percent coupon for three-year RTBs. However, the national treasurer Rosalia De Leon assured that a 2.625 percent coupon will still result in “real positive yield.”

The final witholding tax is 20 percent. If you invest P100,000 during the offer period, you'll receive an annual interest of P2,100 after taxes.

The Bureau of the Treasury awarded an initial amount of P192.7 billion worth of RTBs during the rate setting auction, which was notably higher than the P30 billion offer. The auction also attracted around P278.6 in bids.

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The selling period is until August 7 and the settlement will take place on August 12.

RTBs have become a viable investment option for small investors. These medium to long-term investments offer low risk for beginner investors.

The 2.625 percent interest will be deposited quarterly to your bank account until the investment matures.

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The minimum investment amount is P5,000 for interested Filipinos with accounts in accredited banks selling RTBs.

2020 marks the first year RTBs will be made available via PayMaya, InstaPay, PESONet, and GCash through UnionBank’s Bonds.ph app.

The participating banks listed as selling agents also include: BPI, BDO, DBP, RCBC, PNB, MetroBank, UnionBank, LandBank, ChinaBank, Security Bank, and Overseas Filipino Bank.

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Anri Ichimura
Staff Writer, Esquire Philippines
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