by Prix D Banzon

Davao City (25 July) -- Investors of the Retail Treasury Bond (RTB) during Public Offering (PO) must get the full interest rate of 8.5 percent for the three years and 9 percent for five years.

This was emphasized by Treasurer of the Philippines Roberto B. Tan when he led a team in Davao City for the General Investors' Briefing at The Marco Polo Hotel last Tuesday, July 22.

Tan said selling agents cannot get a spread of the interest rate because if investors buy it during the 2008 RTB public offering on July 18 to 23 they get the full interest rate which was publicly announced and published in leading newspapers.

Deputy Treasurer of the Philippines Eduardo S. Mendiola meanwhile said that selling agents get commission of nine basis point percent or about.009 which is very minimal.

He said the RTB is purposely offered to make available to retail investors and create savings-consciousness among the Filipinos.

For this sector to be provided with the opportunity to avail of the PO, Mendiola said the selling agents are mandated to allocate 50 percent to small investors.

"They (selling agents) must comply on this otherwise they will not get any earnings," he said.

However, Mendiola did not give data on how big was covered by small investors out of the issuance of the RTBs.

This year's issuance was 11th time undertaken by the The Bureau of the Treasury.

For the past 7 years since 2001 over P300 billion in RTBs have been issued where in 2001 total issue was at P38 billion and in 2007 at P77 billion. It was highest in 2003 with P105 billion.

Mendiola said interest rates five years ago was at double digit even as he said that despite the single digit rate given now it is superior to other investments.

He also bared that there are 13 selling agents and 3 issue managers. After the public offering period, investors can buy RTBs from the secondary market at prevailing market prices. The secondary market however will only sell RTBs for a minimum value of P1 million.

On the other hand, Roberto Juanchito T. Dispo, Executive Vice President of the First Metro Investment Corporation said Filipinos are skeptical on investments and that their savings rate is low.

Compared to other Asian countries, he said savings rate in the Philippines is 27 percent of its GDP way below that of Singapore at 43 percent and Indonesia, 37 percent.

Many Filipinos lost savings because money were issued for other purposes and others caught into investment scam.

He said the scam in the country covers about P70 billion. Others include P3 billion for personal care products, P15 billion to casinos, P10 billion lottery, P7 billion jueteng, and the P140 million text per day.