Updated: November 26, 2020
The Philippine Bureau of Treasury has officially launched its one-year peso-denominated “Premyo Bonds Para sa Bayan” last November 25.
They hope that this offering will encourage more Filipinos to become investors. And as an incentive, apart from the usual fixed income you’ll earn, you also get the chance to win a condo unit, a million pesos, and other prizes.
But how exactly do you invest in Premyo Bonds? Below are the answers to the most frequently asked questions that I’ve received so far.
What are bonds?
A bond is a debt security. When you invest in a bond, it means you’re lending money to someone. And the borrower will pay you back with interest — that’s how you make money from bonds.
Learn more about bonds: Bonds for Beginners
What are premyo bonds?
Premyo Bonds are government bonds. This means that the Philippine government, through the Bureau of Treasury, is the one borrowing money from you.
But aside from earning through the interest payments, those who invest in Premyo Bonds will qualify for a raffle where one can win cash prizes among other things.
How to invest in Premyo Bonds? Where can I invest?
Just go to any of these agents or banks, which have been authorized to offer and sell Premyo Bonds to individual investors:
- Banco de Oro (BDO)
- BDO Capital and Investment Corporation
- Chinabank Corporation
- China Bank Capital Corporation
- Development Bank of the Philippines
- First Metro Investment Corporation
- Land Bank of the Philippines
- Metropolitan Bank & Trust Company
- Invest online: First Metro Securities Brokerage
Just go to a branch, fill-up the forms, and follow all pertinent instructions that the bank tells you. It’s important to note that for an Individual, you need to possess a Philippine bank account (current or savings account) from that bank.
Moreover, you can buy or invest in Premyo Bonds only until December 13, 2019.
What’s the minimum and maximum amount you can invest?
The minimum investment is Php 500, which is equivalent to 1 raffle entry. There’s no maximum amount you can invest, but only 20,000 Premyo Bond units will be eligible for the raffle or the Cash Rewards Structure.
What are the interest rates?
The interest rate is 3.000% subject to final tax of 20%.
For example, if you invest Php 100,000 then you’ll earn Php 3,000 less 20% tax or Php 2,400 as interest.
This amount will be divided and paid quarterly. So, you’ll receive Php 600 every three months for a year, which will automatically be deposited to your bank account.
The maturity date is on December 18, 2020. This means, in our example, you’ll receive back that Php 100,000 investment on this date.
What are the raffle prizes? How much are the cash rewards?
For the cash rewards, a total of Php 3 million will be raffled off during the quarterly draws where one winner will win Php 1 million; 10 winners will win Php 100,000; while 50 winners will receive Php 20,000.
The Cash Rewards Structure shall be progressive. As such, the number of winners per Cash Rewards Tier may increase depending on the final issue amount.
Moreover, there will be one winner of a P6-million unit at Hotel 101 Fort in Bonifacio Global City in Taguig City, as announced by real estate company, DoubleDragon. Additional prizes could be announced in the future.
I will be investing in Premyo Bonds. I actually already have an appointment with my bank this week. I’ll let you know about my experience as soon as I’m done.
If you want to read the full details of this offering, then you can download the PDF from this page of the Bureau of Treasury website.
You can also check out this video from Wealth Arki, where I discuss Premyo Bonds with a colleague.