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Investing in Retail Treasury Bonds (RTB) 2018




You want to start investing but you only have five thousand pesos (P5,000)? No problem! This “small” amount is enough for you to participate in the government’s offering of Retail Treasury Bonds (RTB).

For the government, RTBs are debt obligations that will generate cash needed to shore up and finance upcoming projects of the administration. For you, these can both be a personal investment — since you’ll earn interest income as an investor — and a social investment — since you’re contributing to provide funding needed by the government.

For as little as P5,000, you can already take part in the RTB offering of the Philippine Bureau of Treasury this week!


UPDATE (May 30, 2018): The final interest rate for RTB-21 was approved at 4.875% gross per annum.

We have extensive and detailed write-ups about RTB issuances in the past, so revisit these informative articles if you want a refresher on RTB investing:


To reiterate, Retail Treasury Bonds or RTBs are loans or debt obligations of the government used to generate required capital funding. The unique characteristic of this instrument, though, is that it is primarily targeted to individual, also called retail, investors — as opposed to institutional or corporate investors.

This explains why RTB is called “Retail” Treasury Bonds and the cost of a single unit of investment is a measly P5,000 enough to attract small, retail investors.

Details of the 2018 RTB-21 Offer

This week, the Philippine government, through the Bureau of Treasury (BTr), is raising at least P30 billion through the issuance of 3-year RTBs. This means the RTB investment will mature in 3 years, that is, on June 2021.

This is the 21st tranche of the government’s RTB issuance, which is why this specific offering is called RTB-21. Here are more details about the RTB-21 offering:


Tenor (Loan Duration): Three (3) years

Final Interest Rate: 4.875% p.a., determined via Dutch Auction on May 30

Auction Date: May 30, 2018 among Government Securities Eligible Dealers (GSED)

Public Offer Period: 30 May 2018 to 8 June 2018 (may be shortened by the BTr)

Issue Date: 13 June 2018

Form: Scripless

Denomination: P5,000.00 and integral multiples thereof

Indicative Interest Rate: 4.50% – 4.875%, subject to final withholding tax

Interest Payment Period: Quarterly, subject to 20% withholding tax, except for Tax-Exempt Institutions (TEI) upon submission of valid BIR tax ruling and proof of compliance with existing DOF orders and circulars for TEIs


How do I make money from RTB?

RTBs pay a fixed quarterly interest rate in the duration of the investment. For RTB-21, the final and actual interest rate will be determined during the auction to be conducted on May 30. Retail investors are not part of this auction, since the auction will only be among Government Securities Eligible Dealers (GSED), such as banks and financial institutions.

You may start investing in RTBs during the public offer period from May 30 to June 8. As a retail investor, you can acquire RTBs from “Selling Agents” such as banks, trust companies, and other institutions that were awarded RTB lots during the auction. Once an RTB allocation is awarded to you by the Selling Agent, you will receive quarterly income from that RTB investment.

How to compute interest income in RTB?

The interest rate of RTB-21 is 4.875% determined via Dutch auction on May 30. As such, computation of the investor’s interest income is as follows.

  • Sample Investment Amount: P5,000
  • Annual Interest Rate: 4.875%
  • Gross Annual Interest Income: P243.75 (that’s P5,000 x 4.875%)
  • Gross Quarterly Interest Income: P60.9375 (P243.75 divided by 4 quarters)
  • 20% Withholding Tax: P12.1875 (P60.8375 x 20%)
  • Net Interest Income to be Received Every Quarter: P48.75 (P60.9375 minus P12.1875)
  • Net Annual Interest Income: P195.00 (that’s P48.75 quarterly interest x 4 quarters)

Interest income is paid every quarter, that is, every three months. Note that the interest is subject to 20% withholding tax, which is why your actual return becomes P48.75 per quarter. Every year you are entitled to receive interest income, net of tax, of P195.00 for 3 years.

How do I invest in RTBs?

Follow these steps so you can invest in the RTB-21 offering:

  1. Visit your preferred bank to inquire if they offer Retail Treasury Bonds. Most of the big local banks, such as BDO, Metrobank, BPI, Landbank, DBP, Security Bank, UnionBank, ChinaBank, RCBC, etc., are Selling Agents of Philippines RTBs.
  2. Fill out the application form and submit other documents that may be required by the bank.
  3. Once given an allocation, your interest income will be deposited to an existing Peso Savings Account that you have with the bank. If you are not yet an existing client, you will most likely be asked to open a new account.
  4. Every quarter, that is, every 3 months, your RTB interest income will be credited directly to your savings account.
  5. During the RTB’s maturity at the end of the third year, the full principal amount and final quarterly interest payment will be credited to your bank account.

Warning: some bank branches may be unaware about the RTB offering. That’s because such investments are typically handled by the bank’s Trust or Asset Management Group. Contact them (they’re usually housed in the corporate headquarters) to inquire about RTB investments.

Frankly speaking, during the public offer period, it is possible that you won’t get any RTB allocation. Although RTBs are primarily targeted to retail investors, some Selling Agents allocate these investments to their existing high net worth clients or institutional customers. Still, it won’t hurt to ask and try.

(Update: We received a message from a representative of Security Bank explaining that, in their case, they “allocate to all clients who place orders” and, although, it may not always be a full allocation, Security Bank divides it among interested investors that submitted the placement offer. That’s good to know!)

Happy investing!

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