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Government debt issuance will be aided much more by technological advancements.

According to an economist, increased use of digital channels will help the government expand its reach in terms of retail debt issuance.

In an emailed response to questions from the Philippines News Agency, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said roadshows to promote the government’s fund-raising activities, which are now done virtually due to the pandemic, are a win-win move for both the government and the public.

“This is part of the country’s capital markets’ continued development, which further democratizes the distribution of government securities within the reach of the masses/investing public at a minimum investment of PHP5,000 with much higher yield while having among the safest securities issued by the national government and highly marketable/tradable at the same time, thereby effectively tapping more of the excess/surplus funds from the general public,” he said.

For one thing, the Bureau of the Treasury (BTr) is set to auction another batch of retail treasury bonds on Tuesday (RTB).

Because the minimum investment is PHP5,000, RTB is one of the government’s retail securities aimed at small investors.

The government has been pushing people to invest in government-issued debt securities not only to save money for the future but also to help the economy recover.

Despite the epidemic, the government continued to promote its debt securities offering by doing virtual roadshows that reached a wider audience of Filipinos living abroad.

More Filipinos purchasing government-issued bonds, according to Ricafort, will increase the state’s ability to fund programs aimed at mitigating the pandemic’s effects.

The virtual roadshows, he added, gave more individuals a chance to learn about the “critical social role of investing in RTBs to support the governments’ different Covid-19 programs.”

Gains from fund-raising initiatives will be extremely advantageous “for general economic development and nation-building,” he said, “thereby further strengthening the appeal of investing in RTBs and other government assets.”

“Further raising public awareness, particularly through social media and other forms of advertisements/announcements, as well as ensuring greater ease of transacting RTBs and other government securities through the harnessing of additional digital/online banking channels would be among the key improvements over the past 5 years,” he said.

This is “similar to the digital platform/infrastructure adopted more than a month ago during the Retail Dollar Bond (RDB) offering, thereby making the fund-raising and distribution processes faster and more efficient, in response to the changing business environment and the demand/requirements of the investing public,” he added.

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This article is for informational purposes only and does not constitute endorsement of any specific technologies or methodologies and financial advice or endorsement of any specific products or services.

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