THE national government on Monday borrowed P15 billion through its maiden offering of tokenized version of Treasury bonds (TTBs), 50-percent higher than its initial target, the Bureau of Treasury (BTr) announced Monday.
The Treasury said it upsized the target issue amount of P10-billion worth of tokenized debt instruments following an overwhelming demand from the domestic market.
Total bids from domestic investors for the 1-year TTBs reached P31.426 billion, more than triple than the initial programmed issuance.
“The BTr saw strong demand from qualified institutional investors for the TTBs, with the size of the book reaching P31.426 billion, more than three times the target issue size of P10 billion,” the Treasury said in a statement.
“This allowed the BTr to upsize the issue to P15 billion at 6.50 percent, aligned with the prevailing 1-year secondary market rates despite the non-tradability of the TTBs,” it added.
The TTBs will be settled on November 22 and will be issued in the form of digital tokens, which will be maintained in the BTr’s Distributed Ledger Technology (DLT) Registry.
The Treasury said the issuance of the TTBs is part of the national government’s thrust to promote “greater” financial inclusion and “broader” participation in the bond market by modernizing its financial platforms and reducing friction costs.
“The bond tokenization program is anchored on the national government’s long-term vision of a financially-inclusive domestic capital market,” Finance Secretary Benjamin E. Diokno said.
“Through streamlining settlement procedures and minimizing friction costs, this initiative is a huge leap towards our end goal of democratizing investment and empowering our small investors,” Diokno added.
Bangko Sentral ng Pilipinas Governor Eli M. Remolona Jr. said the issuance of the TTBs fits well with the central bank’s push for “broader” digital transformation and capital market development.
Remolona said he is hopeful that the TTB sale would be expanded in the future to retail investors. (Related story: https://businessmirror.com.ph/2023/11/17/phl-to-start-selling-tokenized-treasury-bonds/)
“Our goal is to expand investment options so that more Filipinos can grow their money through these fixed-income investments while contributing directly to economic growth,” the central bank governor said.
“Right now, the focus is on institutional investors but hopefully, we can expand this project to retail investors over time,” Remolona added.
An assessment by the Asian Development Bank Institute in 2020 has shown that tokenized securities “are limited by immature infrastructure and regulatory uncertainty, while promising significant potential benefits compared to conventional financing mechanisms.”
