Government-issued bonds will soon be accessible to retail investors through GCash, as part of the Philippine government’s digitalization and financial inclusion initiatives.
What is the meaning: The integration makes government bonds more accessible, affordable and convenient for retail investors as GCash has over 83 million users.
Key details: The Treasury, in partnership with GCash and PDAX, will launch GBonds this month.
- The announcement: Secretary of Finance Ralph Recto announced this during the 127th anniversary of the Treasury Bureau on November 11, 2024.
- Recto urged GCash, PDAX and regulators to accelerate the process to boost financial inclusion.
- The goal: The initiative aims to empower Filipinos to secure their financial future comfortably from their homes.
- The exact date: An official launch date has not yet been revealed, as the initiative needs pending final regulatory approvals.
Key quote:
“We envision a future where investing in government bonds is no longer a luxury but a new normal for Filipinos, with just a few steps and as easy as ordering your favorite food for delivery… This allows our people to secure their future effortlessly, all from the comfort of their homes.”
Ralph Recto, Secretary, Department of Finance
How it works: Bonds are fixed-interest securities in which investors lend money to governments or corporations and earn interest, receiving the principal and accrued interest at maturity.
- How are bonuses calculated? If a person buys a ₱10,000 bond with an annual interest rate (APY) of 6% and a maturity of 12 months, they will earn ₱600 in interest, so their total investment will be ₱10,600 after one year.
- In 2023: Tokenized treasury bonds on the blockchain were launched through PDAX, allowing investments as low as ₱500 with an interest rate of 6.2%.
- Earlier this year: The Philippines achieved a milestone by raising more than $10 billion through retail treasuries, surpassing previous records.
worth reading: Check out this article from BitPinas that compares bonds and digital bank savings accounts, highlighting their features for low-risk investors.
This article is published on BitPinas: Bureau of Treasury, PDAX and GCash to launch GBonds in December
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