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Retail Treasury Bonds (RTB)

FutureGizmo · 161 · 66099

FutureGizmo

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on: Nov 28, 2006, 08:15 AM
Retail Treasury Bonds (RTBs) are direct and unconditional obligations of the national government which primarily caters to the retail market or the end-users. They are issued by the Bureau of Treasury (BTr). They are interest bearing and carry a term of more than one year and can be traded in the secondary market before maturity.

Retail Treasury Bonds are safe, liquid and offer attractive returns to investors.

Features:

Issuer    :   National government
Term    :    3 and 5 years
Tax feature    :    Interest income subject to 20% final withholding tax
Type of income    :    Tax paid income
Rate    :    Fixed for the life of the RTBs
Coupon payment period    :    Payable quarterly in arrears
Interest computation    :    Simple interest/add-on
Manner of purchase    :    Auction or through secondary market

Retail Treasury Bonds are issued and sold at a price equal to be face value and are redeemed at maturity for the full face value of the instrument plus interest/coupon of the last period.

- From the Money Market Association of the Philippines



Where to buy RTBs?

The best source of information on which institutions sell Retail Treasury Bonds is the Bureau of Treasury website, specifically this page http://www.treasury.gov.ph/govsec/gsedlist.html.

However, Inq7money also encourages you to browse through the website's section on government securities at this address. (http://www.treasury.gov.ph/govsec/aboutsec.html).

You should also know that the list of Government Securities Eligible Dealers (GSED) would show you financial institutions that are allowed to sell government debt instruments, however it is possible that not all of them are selling RTBs due to various factors i.e. some might not have been able to buy RTBs during the last auction. Your best bet would be to choose the top 15 commercial banks (based on size) from the list.

Although RTBs were designed as an investment option for the so-called "masa" or lower income segments, Inq7money's research shows that some banks require a minimum investment of 100,000 pesos or even higher, a level that is much higher than the 5,000 denomination the Treasury has envisioned for it.

Sources from some of these banks say that banks find it very expensive to service a bond investor with only a 5,000-peso investment. For example, they prepare the documentary requirements for a bondholder, and send a messenger every quarter to deliver the interest earned, among other things.

However, some banks do follow the government's minimum investment level on RTBs. As any financial manager would advise you, "shop" around for the bank whose service and products suit your taste and purposes.

- From Inq7.net



The latest RTB news: 5-year Retail Treasury Bonds rate set at 5.875%

THE government has set a coupon of 5.875 percent for five-year Retail Treasury Bonds to be offered to the public, the Bureau of the Treasury said.

The government sold P6 billion of these bonds to banks at Monday's auction for pricing purposes, and will offer another P14 billion to small investors in coming days.

Tenders totaled P9.791 billion, with bids ranging from 5.50 percent to 5.95 percent, for an average of 5.729 percent. Shortly before the auction, the government announced a ceiling of 6.125 percent for the bids.

National Treasurer Omar Cruz said the coupon on the latest Retail Treasury Bonds was much lower than the coupon on those issued three years ago because economic conditions had improved since then. He said the lower coupon factored in easing inflation and the government's healthier finances.

- From Inq7.net

More readings on the Philippine Retail Treasury Bonds:

- 9% and 8.5% RTB offering in July 2008
- What are RTBs? From the ADB Bonds Online website
« Last Edit: Aug 15, 2009, 07:47 AM by FutureGizmo »


AMARANTH

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Reply #1 on: Nov 29, 2006, 08:23 PM
SUS! Ang baba ng 5.8% for 5years at gross pa ito kung hindi ako nagkakamali ( 4.7%net ) buti pa maybank mas mataas pa, i think nasa 7% ata ngayon at monthly credited pa.
Posted on: Nov 29, 2006, 08:19 PM
ADDvantage Fixed offers
• Php50,000 minimum placement
• 5 year term
• 7.5% tax-free interest rate
• interest earned added to principal at the end of term
• waived documentary stamp charges
 

ADDvantage Flex offers
• Php50,000 minimum placement
• 6.75% interest rate on 1 year term
• 7.00% interest rate on 2 year term
• 7.25% interest rate on 3 year term
• monthly interest payout to a linked Savings or Checking Account
• subject to 12% withholding tax for 3-year term, regular withholding tax rate for 1 & 2 year terms
• waived documentary stamp charges

ADDvantage Plus offers
• Php50,000 minimum placement
• 5 year term
• 7.5% tax-free interest rate
• monthly interest payout to a linked Savings or Checking Account
• waived documentary stamp charges  

Please note that all interest rates are subject to change without prior notice.



Wynn

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Reply #2 on: Nov 29, 2006, 08:24 PM
he, he hindi kasi masyado kelangan nang pera nang gov't ngayon, ang taas kasi kita nang gov't sa pag appreciate nang peso


krynn

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Reply #3 on: Mar 11, 2007, 12:07 AM
'sensya na po, isa akong mangmang sa usaping investment. kailan lamang ako nagbasa tungkol dito at ang layo ng nalalaman ko ay kung ano man ang napag-usapan sa thread ng Mutual Fund sa forum na ito :)

since liquid lamang po ang kaperahan ko, at siya ay dumarating tuwing araw ng sweldo sa Banco de Oro, tumingin ako kung ano ang investment services ng BDO.

syempre attracted ako agad sa may pinakamababang minimum. At according to their website, ang Retail Treasury Bonds ang may pinakamababang minimum which is 5,000. Hanggang introduction lang ang naintindihan ko XD~

excited ako na ako mag-start sa Mutual Fund, pero curious talaga ako sa RTB na ito, kase mas maaga ako makakapagsimula dahil mas mababa ang minimum.

ang tanong ko po, (hingi ako advice), is it wise to start with this kind? what should I expect if I open an account with them with this RTB?

salamat po sa mga sasagot ^__^


annanymous

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Reply #4 on: Mar 25, 2007, 11:06 PM
^Hi krynn, naku medyo matagal na pala yung post mo. Try ko sagutin ha pero hindi ako expert. :hihi:

Sa tingin ko ok naman mag-invest sa RTB. May government guaranty so walang lugi. Yun nga lang di ganoon kalaki ang profit kung ikukumpara sa ibang investments. Pero ok na yan since nagsisimula ka pa lang namang mag-invest. Sa mutual fund kasi, maghihintay ka pa kung kailan tataas yung navps para maibenta mo at kumita ka. Sa RTB, may maturity date at siguradong kikita ka. Pag ready ka nang mag-take ng risk, saka ka na lang mag-invest sa mutual funds/uitf. Sa Metrobank merong uitf na P5,000 lang ang minimum.


murdoc802

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Reply #5 on: Oct 05, 2007, 05:21 AM
the sites dont work.. are they offline if its not office hours? hehe..
i tried asking about rtb with bdo.. they say its not yet available..
whre dyou get info that its currently being sold or available.. small time investment only for 5k..


nailbiter

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Reply #6 on: Oct 05, 2007, 08:49 AM
murdoc802, the last post in this thread was last March yet, so hindi na current ang info rito. :)  Per www.mart.com.ph, the last offering was in July and they were all sold in August.


foolcha

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Reply #7 on: Nov 04, 2007, 09:50 PM
hirap maghanap ng RTB if ever meron ubos kaagad. Anyone knows Sang Bank merong RTB?


Dutch_Boy

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Reply #8 on: Jan 26, 2008, 01:38 AM
mga sirs, clarify ko lang. there is a very common misconception about RTB's and other govt. issued securities na "walang lugi". this is only partly true. there are market forces and pricing valuations at work whenever to sell or trade such securities in the secondary market. what should be the statement is that: "walang lugi if we hold on to the security, whether RTB or FXTN until maturity". ang kicker jan ay yung date of maturity.

example: bond funds (UITF or MF) which contain 100% fixed income securities, because of "marked-to-market" valuation may increase or decrease its NAVPU or NAVPS daily because of changes in the interest rate scenario, etc.


foolcha

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Reply #9 on: Feb 07, 2008, 11:15 PM
Dutch_Boy

GS is almost risk free talaga because it is guaranteed by the Gov't however if you TRADE GS there is a possibility of gain/loss.

Mutual fund/UITF does not contain 100% fixed income securities meron yan a portion in SA for liquidity purpose but not more than 15% of the total fund.

Mutual fund/UITF seldoms TRADE GS unless they already in a position of a GAIN or if there is insufficient fund to cover for withdrawal.


Dutch_Boy

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Reply #10 on: Feb 09, 2008, 02:30 AM
« Last Edit: Feb 09, 2008, 03:42 AM by Dutch_Boy »


Amphitrite

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Reply #11 on: Mar 24, 2008, 03:21 AM
Pwede po magtanong?

Paano ang computation ng interest ng RTB?

ganito ba.. 5000 x 5.875% x 5 yrs - 20% (tax) = interest upon maturity?

Thanks


FutureGizmo

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Reply #12 on: Mar 24, 2008, 04:19 AM
Yup, ganyan nga, basic interest computation lang. So for a 5-year RTB worth P5,000 paying 5.875% interest per annum, the after-tax income after 5 years is:

P5,000
x 5.875%
x 5 years
P1,468.75
- 293.75 (20% tax)
P1,175.00

re: Dutch_Boy's post, tama siya na hindi totoong walang "lugi" sa GS. Tulad ng nabanggit niya, maraming risks involved sa isang bond security tulad ng RTB o kahit tulad ng Treasury Bill o Treasury Note. Totoo, para wala kang lugi, kelangan mong hawakan yung security until maturity. Otherwise, magiging biktima ka ng price fluctuation kung ibebenta mo yung hawak mong security priort to maturity lalo na kung nagbabago ang interest rate sa market.

Basta yun, kung investor ka na hahawakan mo until maturity yung GS, wala ka ngang lugi. Pero kung ite-trade mo yun, posible kang matalo. Proof nyan e yung mga Money Market at Bond UITFs at Mutual Funds na nagi-invest sa GS pero sa ngayon ay negative ang performance.


nailbiter

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Reply #13 on: Mar 24, 2008, 08:21 AM

interest upon maturity?


Clarification lang. As written in the first post, interest is paid quarterly.


Coupon payment period    :    Payable quarterly in arrears

Retail Treasury Bonds are issued and sold at a price equal to be face value and are redeemed at maturity for the full face value of the instrument plus interest/coupon of the last period.


Dutch_Boy

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Reply #14 on: Mar 28, 2008, 05:04 PM

Yup, ganyan nga, basic interest computation lang. So for a 5-year RTB worth P5,000 paying 5.875% interest per annum, the after-tax income after 5 years is:

P5,000
x 5.875%
x 5 years
P1,468.75
- 293.75 (20% tax)
P1,175.00

re: Dutch_Boy's post, tama siya na hindi totoong walang "lugi" sa GS. Tulad ng nabanggit niya, maraming risks involved sa isang bond security tulad ng RTB o kahit tulad ng Treasury Bill o Treasury Note. Totoo, para wala kang lugi, kelangan mong hawakan yung security until maturity. Otherwise, magiging biktima ka ng price fluctuation kung ibebenta mo yung hawak mong security priort to maturity lalo na kung nagbabago ang interest rate sa market.

Basta yun, kung investor ka na hahawakan mo until maturity yung GS, wala ka ngang lugi. Pero kung ite-trade mo yun, posible kang matalo. Proof nyan e yung mga Money Market at Bond UITFs at Mutual Funds na nagi-invest sa GS pero sa ngayon ay negative ang performance.


Thanks Prof. FG for explaining further. What are you teaching nga pala BA 145? 141? 142?


 


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