As a fellow investor, I would not be surprised that the news on the current global crisis made you feel scared and confused as to what will happen and where to place your hard-earned money these days. Well, government securities such as Treasury bills (T-bills), Fixed Rate Treasury Notes (FXTNs) and Retail Treasury Bonds (RTBs) might just be the answer you are looking for.
T-bills, FXTNs and RTBs are the safest investment instruments available in the market, being direct and unconditional obligations of the national government. They are actively traded and are very liquid, thus enabling investors to buy or sell their investment anytime at current market prices.
T-bills are similar to other short-term investment instruments such as a savings account, time deposit, money market funds and BSP Special Deposit Account. They are available in varying tenors or maturity up to a maximum of one year. Interest from the said security are not paid periodically but are given as a form of discount. For example, if you invest one hundred thousand pesos (P100,000.00) face value in a 6.6% 364- day Tbills, you would only need to pay approximately ninety five thousand pesos (P95,000.00). The five thousand pesos (P5,000.00) difference in the amount you invested and the face value is the interest that you will receive on the day the security matures.
For those who wish to increase their return by investing in securities with a term of more than one year, they can look at FXTNs and RTBs. Both provide investors with regular cash inflows (quarterly interest payment for RTBs and semi-annual interest payment for FXTNs). Unlike T-bills however, these instruments may not necessarily be bought at a discount. They might also be purchased at a price equal or higher than the issue price. Your broker will thus require you to pay the principal [face value plus (minus) premium (discount)] and the accrued interest (if date of purchase is after issuance or interest payment date).
As an added protection to public investors, the Bangko Sentral ng Pilipinas (BSP) issued circular 392. It required brokers to transfer client purchased securities to the securities account of a client with a BSP-accredited third party custodian. A client security account separates and distinguishes the client securities from the bank’s securities.
Should you be interested to invest in these securities, you may inquire with any SEC registered broker financial institutions. You may invest in these securities for as low as five thousand pesos (Php 5,000.00) face value and for minimal commission and fees, depending on your broker.
To learn more about T-bills, FXTNs, RTBs and other investment products, you can visit the Money Market Association of the Philippines (MART) website at http://www.mart.com.ph or the Bureau of Treasury website at http://www.treasury.gov.ph