Juan Eu Konek

PH Economic Managers Kicked-off Financial Literacy Session in Europe by Announcing Retail Dollar Bond (RDB) Offering to Filipinos in UK

By Kyla Allyna Donnelly 

London – Keynote Speaker and Secretary of Finance Benjamin Diokno spoke to the Filipino Community about the year-end economic performance of the Philippines, debt management plan, and Philippine Government’s social and economic development plan from 2023-2028, while encouraging the Filipino community during the event to invest in a number of National Government Retail Instruments.

Secretary Diokno started the event held in Kensington, London of  26th January 2023, by giving a speech about the Philippine economy’s recent and impressive performance, giving emphasis on the Philippines highest GDP rate of 7.6% in over 40 years, the first since 1976. In his presentation, he showed that the Overseas Filipino Workers in the United Kingdom has the 5th highest remittances, making up a portion of the total of $29.38 billion worth of remittances from our kababayans around the world. 

He also presented the Philippine Government’s development plan for economic and social transformation for the next 5 years which include “Digitization”, a transformation that will result in “more efficient and faster public service delivery, more transparency, and fewer opportunities for corruption at various levels.” Furthermore, Secretary Diokno showed to the Filipino audience the Government’s Debt Management Plan. He noted in his presentation that the Philippine Government “needs to raise Php 2.21 trillion in borrowings. 75% of Php 1.65 trillion will be sourced domestically while 25% of Php 554 billion will be in external debt.” 

Secretary Diokno proudly announced that the Philippine Government uses these investments of our kababayans to build infrastructures and improving transportation system in the Philippines. He specifically announced that work is underway to build railway links from Manila to connect to Northern part and Southern part of Luzon, a project that is possible through the help of Filipinos who chose to invest their savings in a number of National Government Retail Instruments.

Secretary Diokno ended his speech by encouraging the Filipinos at the event to invest in the Government retail instruments to grow their investment, while reiterating that if our kababayans choose invest their hard-earned money in Government Retail Bonds, “their investments will boost the Philippines’ long-term growth and reinforce the strength of our economy for generations to come”. 

To access Secretary Diokno’s full speech, please click this link: https://www.dof.gov.ph/keynote-speechfinancial-literacy-sessionin-london-united-kingdom/

The Retail Dollar Bond 2 first-quarter offering 

First-Vice President and head of the CFG Development Bank of the Philippines, Mr Francis Nicolas M Chua, explained the key features and highlights of the RDB2. The Retail Dollar Bonds will offer small investors such as an “outlet for diversifying their investment portfolios.” As such, with a minimum investment of just $200, small investors can grow their US dollar savings, as opposed to parking their dollar investment in bank accounts that “pay minimal interest”. Mr Chua stated that one of the most important feature of the RDB2’s is it is “low-risk and safe” because it is a “direct, unconditional, unsubordinated, and general obligations of the Republic” to RDB2, which means it is “backed by the financial capacity of the Republic”. 

When Retail Dollar Bonds first launched in 2021, the minimum investment had to be $300. This first launch raised $1.6 billion according to the Bureau of Treasury. Mr Chua emphasised that lowering the deposit to $200 allows financial inclusion among Filipinos. Secretary Diokno stated that this year’s RDB2 or second round of offering the retail dollar bond to foreign investors is expected to amount to $3 billion.

The target audience being onshore retail investors, including Overseas Filipino Workers, who are seeking “low-risk, accessible and relatively higher-yielding investment and who are looking to diversify their investment portfolio”. This gives them the opportunity to expand their sources of income, rather than relying on their 9 to 5. It therefore, removes the fear and exclusivity around stocks and bonds by not only making it user friendly but by offering them security and protection around their investment.

I  learned a lot from this event and hoping to hear more on this project.