Why Should You Invest In The Philippine Government Securities?

10/22/2021

The most important thing you'll ever do in your financial life is to decide to truly understand the various types of investments and what their potential risks and returns are.

A Simple Reminder!

Before you invest, you must first decide what your financial goals are. What do you want to accomplish, and in what period? What's your risk tolerance, the amount of risk that you're comfortable with? Without a clear understanding of your desires, your needs, and your potential concerns, what to invest in is not clear.

The Reality...

There are lots of financial instruments that will help you to reach time and financial freedom such as Stocks, Mutual Funds, UITF, REIT, and Exchange-Traded Fund (ETF).

Holding different types of investment in a portfolio minimizes risk through diversification. As the old saying goes, "Do not put all your eggs in one basket." Diversification helps manage risks!

If you are the type of person who is looking for an investment vehicle for Capital Preservation, you may consider investing in the Philippine Government Securities.

What are Government Securities?

Government Securities are unconditional obligations of the sovereign state. It's backed by the complete taxing power of the sovereignty. Therefore, government securities are practically free from default.

What are the types of Philippine Government Securities that are currently offered?

Treasury Bills (T-Bills)

These are peso-denominated government securities that are short-term in nature, usually with tenors of 91, 182, and 364 days.

Bonds

It is a debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period at a fixed interest rate.

Treasury Bonds

These are peso-denominated government securities which mature beyond one year. These are sold at its face value on origination.

Retail Treasury Bonds (RTBs)

These are fixed-income, peso-denominated government securities which mature beyond one year, and are offered to retail investors.

For Retail Treasury Bonds calculator, check this link from the website of the Bureau of Treasure Website.

Premyo Bonds

These are short-term debt securities issued by the Republic of the Philippines that also provides investors with the chance to win rewards every quarter.

For Premyo Bonds calculator, check this link from the website of the Bureau of Treasure Website.

Retail Dollar Bonds (RDBs)

These are the counterpart of the Peso Retail Treasure Bonds which are medium-to long-term debt securities that are in dollar denomination.

For Retail Dollar Bonds calculator, check this link from the website of the Bureau of Treasure Website.

Why should you invest in the Philippine Government Securities?

Higher return than time deposits.
Default-risk as full amount is direct obligation of the government.
Negotiable—can be sold should liquidity need arises.
Principal amount is regained upon maturity, but may not be the case if sold before maturity.
Interest earned quarterly.

Where to buy Philippine Government Securities?

Philippine Government Securities Eligible Dealers

You may purchase government securities through any of the Government Securities Eligible Dealers. Visit Bureau of the Treasury's Website for the complete list of partner banks.

Online Platforms

Retail government securities can also be purchased through the following online channels: