Retail Treasury Bonds (RTB) in the Philippines 2019

Pinoy Money Talk

Do you have extra cash and you want to invest it in a low-risk investment product that offers higher interest rate than typical savings and time deposits?

Then you might want to invest in Retail Treasury Bonds (RTB), an investment outlet offered by no less than the Bureau of Treasury of the Philippine government.

For a minimum amount of P5,000 (yup, just five thousand pesos), you may already take part in the RTB offering.

What are Retail Treasury Bonds?

Retail Treasury Bonds or RTBs are debt obligations of the government. Simply speaking, ito ay utang ng gobyerno na gagamiting pang-pondo sa mga gastusin tulad ng infrastructure projects, social services, at iba pang pinagkakagastusan ng Philippine government.

Any investor may invest in the RTB for as low as P5,000. Additional investment should also be in multiples of P5,000.

* Want to learn more about investing in Philippine RTB? Here are UPDATED articles!

What is the interest rate of the RTB 2019 offering?

RTBs are fixed-income instruments, meaning they pay a fixed and known interest rate for the life of the investment.

For instance, the RTB issued by the Bureau of Treasury on February 2019 was a 5-year bond paying 6,25% per annum. This means an investor will get a gross interest rate of 6.25% per year continuously for five (5) years.

The interest payments are credited to the investor’s account every quarter, subject to a 20% withholding tax.

How are interest earnings computed?

Because there is a 20% withholding tax on the earnings, the important rate to consider is the effective interest. Assuming a 6.25% gross interest rate, the effective rate that will be earned by the investor is 5.00% per year.

Thus, your P5,000 investment will earn P250.00 per year, computed as follows:


x 6.25% coupon rate per annum

= P312.50 gross return every year

Less: 62.50 (20% withholding tax)

= P250.00 net return every year

Interest payments are paid every quarter (that is, every 3 months), so you will be receiving P62.50 interest earnings every quarter (that’s P250.00 divided into four quarterly payments of P62.50).

If your investment is P100,000 your net interest earnings will be:


x 5.00% coupon rate net of 20% withhoding tax

P5,000.00 net return per year

Since payment of coupon interest is quarterly, you will be receiving interest earnings of P1,250.00 every 3 months.

Not bad, considering it is a relatively safe investment.

Why are RTBs considered safe investment? 

RTBs are issued by the Philippine government, meaning, the government itself is backing this security. Of course, there is still some degree of risk or the possibility that the Philippines would default on its loan obligations. Historically, though, this sovereign risk is considered low. Therefore, in the case of RTBs, the possibility of loss of capital is also low.

OK, how do I start investing in RTBs?

Here’s how you can invest in the Philippine RTB offerings:

1. Visit any bank to inquire if they offer Retail Treasury Bonds (RTB). Big banks such as BDO, Metrobank, BPI, Landbank, DBP, Security Bank, UnionBank, ChinaBank, etc. would typically offer RTBs.

Take note, however, that some bank branches may be unaware about the RTB offering. That’s because such investments are typically handled by the Trust Division or Asset Management Group of that bank. You may have to directly contact the the Trust or Asset Management Division (they’re usually housed in the corporate headquarters) to inquire about RTB investments.

2. Fill out the application form and submit other documents required by the bank.

3. Make sure you have an existing Peso savings account or open a new savings account with the bank. This is where the principal payment (your initial investment) will be deducted from.

4. Every quarter (that is, every 3 months), the interest earnings will be deposited/credited directly to your bank account.

5. At the RTB’s maturity, the full principal amount will be credited to your bank account, together with the final quarterly interest payment.

* Want to learn more about investing in Philippine RTB? Here are UPDATED articles!

Pinoy Money Talk is an educational website about money, banking, investments, and personal finance which started in 2005. Its group of five writers consists of one equity research analyst, one fintech startup owner, one finance educator, and two investment professionals.