Manila, Philippines – The Bureau of the Treasury's (BTr) first-ever offering of Tokenized Treasury Bonds (TTBs) was met with overwhelming demand, leading to an oversubscription by more than three times the initial offer. This enthusiastic response prompted the BTr to increase the size of the digital token debt offering.
According to Philippines News Agency, the TTBs were initially offered at PHP10 billion but were upsized to PHP15 billion due to tenders reaching PHP31.426 billion. Despite being non-tradable, the yield for this blockchain technology-enabled debt offering is set at 6.5 percent, aligning with one-year secondary market rates. The TTBs, set to be settled on November 22, 2023, will be issued in the form of digital tokens and maintained in the BTr's Distributed Ledger Technology (DLT) Registry.
The BTr has implemented a dual registry structure for the program, with the DLT Registry running alongside the National Registry of Scripless Securities (NRoSS), the primary registry. The issuance of these maiden TTBs aims to broaden participation in the bond market, promote greater financial inclusion, and modernize financial platforms.
Finance Secretary Benjamin Diokno highlighted the bond tokenization program's role in the national government's vision of a financially inclusive domestic capital market. This initiative is expected to streamline settlement procedures and reduce friction costs, democratizing investment opportunities for small investors.
BSP Governor Eli Remolona Jr. linked the initiative to the wider digital transformation and capital market development efforts of the Bangko Sentral ng Pilipinas (BSP). The TTBs, with a minimum denomination of PHP10 million and subsequent increments of PHP1 million, are similar to conventional government securities offers. Remolona emphasized the goal of expanding investment options to grow Filipinos' money through fixed-income investments while contributing to economic growth. While the focus is currently on institutional investors, there are plans to expand the program to retail investors in the future. The issue managers for the TTBs are the Development Bank of the Philippines and the Land Bank of the Philippines.