The Bureau of Treasury (BTR) has announced that it has allocated P15 billion of maiden tokenized bonds, which will be offered to institutional investors. The bonds were priced at a coupon of 6.5% per annum with bids totaling P31.426 billion, more than triple the initial offer size of P10 billion.
The BTR chose to partner with PDAX, a cryptocurrency platform, in offering the bonds.
“The issuance of TTBs is part of the government securities digitalization roadmap which aims to promote financial inclusion and deepen market liquidity,” said Deputy Treasurer of the Philippines, Erwin Sta. Ana.
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Sta. Ana noted that the BTR hopes that these TTBs will be a security that retail investors can acquire in denominations that are even lower than existing retail products.
“In addition, we envision market participants to be able to trade these securities among themselves and to be able to settle their transactions in real time,” Sta. Ana said. “Turning this vision into reality, however, will require us to build the infrastructure that will enable it incrementally. Today, we take the first step in this journey.”
Institutional buyers
The collaboration aims to leverage tokenized bonds to enhance transparency and interoperability, while reducing size and liquidity requirements through lower transaction costs.
While the Maiden Tokenized Treasury Bonds are only made available to Qualified Institutional Buyers through the DBP and Landbank, retail investors can access other treasury bills on the PDAX app. Bonds on PDAX eliminate the need for physical visits to a financial institution’s office. For as low as P500, investors can access low-risk instruments backed by the full faith and credit of the Philippine government. The tokenized T-Bills available provide a yield of around 6.2% and have a maturity of 91 days.
“Offering these bonds to institutional investors serves as the first step to a more seamless trading and settlement experience for government securities in the Philippine financial markets,” said Nichel Gaba, CEO, PDAX.