Treasury eyes future Premyo bond offer

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By Beatrice M. Laforga

THE GOVERNMENT will likely offer Premyo bonds again as it sold nearly P5 billion worth of the one-year papers, National Treasurer Rosalia V. de Leon said last weekend.

Ms. De Leon said the government raised P4.961 billion via the Premyo bond sale, upsizing from its original offer of P3 billion.

In the wake of strong reception, Ms. De Leon said the Treasury will discuss with Finance Secretary Carlos G. Dominguez III the possibility of again offering the bonds, which are meant to encourage individuals to invest in government securities.

“Total sales were over P4.961 billion. Following strong reception of Premyo bonds, we will recommend to Secretary Carlos G. Dominguez III to continue,” she said in a mobile phone message on Saturday.

The three-week offer period ended on Friday at 3 p.m.

The one-year bonds will be issued on Wednesday, Dec. 18.

One bond trader said the good reception will likely encourage another offer by the Bureau of the Treasury (BTr).

“For the Premyo bonds, that is actually a good reception given the challenge of being a new product for the public,” the trader said in a mobile phone message on Sunday. “I believe this will encourage BTr to pursue another round in the future.”

For Kevin S. Palma, peso debt trader of Robinsons Bank Corp., the offer “was indeed a superb investment outlet to encourage the public to save.”

“This was indeed ideal for retail investors who seek a minimal investable amount and it comes with a bonus of 3% interest per annum, which beats current inflation rate,” Mr. Palma said in a Viber message on Sunday.

Ms. De Leon had said the last time that the government offered the same debt product was in the 1970s.

The debt papers carry an interest rate of 3% per annum, which will be paid quarterly and is subject to a 20% final tax. “Interest on the Premyo bonds, to be calculated on a 30/360-day basis, will be paid quarterly in arrears on the last day of each three-month interest period. Each Premyo bond will cease to bear interest after the maturity date,” the Bureau of the Treasury said in a notice.

Aside from earning interest, bondholders could also win cash prizes of up to P1 million and non-cash prizes such as condominiums during quarterly draws.

Every P500 investment translates to one raffle entry for the bondholder.

However, the number of Premyo bonds that investors can hold is capped at 20,000 units, or worth P10 million per selling agent, to qualify for the raffle.

Under its cash reward scheme, a total of P3 million will be raffled off with one winner taking home P1 million, 10 others to win P100,000 each, while 50 investors can win P20,000 each.