If investing in the stock market is not for you due to high volatility and risks involved, investing in treasury bills in the Philippines is one good option. You need to learn investing your money to beat inflation or to let your money grow and work for you. Investing your money in a low-yield investments is better than keeping it at home inside your bed.
To protect the value of your money, you should look for investments where returns is higher than inflation. That’s the best thing we can do to not lost the value of our money.
In this short article, I will share information I gathered on how to invest in treasury bills in the Philippines.
How to invest in treasury bills in the Philippines
What is Treasury Bills?
According to treasury.gov.ph, treasury Bills are government securities which mature in less than a year. There are three tenors of Treasury Bills: (1) 91 day (2) 182-day (3) 364-day Bills. The number of days are based on the universal practice around the world of ensuring that the bills mature on a business day.
Treasury Bills are quoted either by their yield rate, which is the discount, or by their price based on 100 points per unit. Treasury Bills which mature in less than 91-days are called Cash Management Bills (e.g. 35-day, 42-day).
Why invest in treasury bills in the Philippines?
- Not too volatile and risky like the stock market
- You can get the interest in advance or on the maturity date
- Investing in Tbills is practically risk free since there is a low probability that the Philippine government will default on its own local currency debt
- Interest is high enough than normal savings account and time deposit account
Where to buy treasury bills in the Philippines?
Here in the Philippines, you can buy treasury bills in the banks. It is being offered in almost every local banks here in the Philippines. To give you some insight, here’w what I found on the major banks here in the Philippines about treasury bills.
PNB (Philippine National Bank)
- Minimum investment is P200,000
- Tenors are available in 91, 182 and 364 days
- Commision 20% (I think this is on the income of investment)
For inquiries and indicative rates, please call Treasury Marketing Group at (02)526-3019 to 26.
BDO (Banco de Oro)
- Minimum Amount: P100,000.00 (in increments of P1,000)
- Investment Terms: 91-days, 182-days, 364-days (subject to availability)
- Transaction Document : Confirmation Notice
Can be used as a collateral for loans with BDO. Interest income on the investment is subject to 20% final withholding tax
BPI (Bank of the Philippine Islands)
- Minimum purchase P100,000 for 364-Day treasury bills
- interest rate is subjected to 20% tax
- Minimum amount required: P500,000
- Tenors of 91, 182, and 364 days
- 20% final withholding tax on discount
How to invest in treasury bills
Since most of the major banks here in the Philippines are the main brokers of treasury bills, the best way you can open an account or investment is to go in the nearest bank of your choice. I’ve already provided some data that you can use as a guide from the major banks here in the Philippines.
Visit the nearest bank in your area and advise that you’re going to open an investment in treasury bills.
Investing in treasury bills in the Philippines is basically a good option and alternative especially for people who do not want high risks and volatility. Treasury bills provide higher interest than any other savings account and time deposits here in the Philippines.
We are planning to invest in treasury bills in the near future that’s why I made some research and I’m sharing it to you. I will share our experience in the future articles.
I hope I provided some information that could help you if you’re also planning to invest in treasury bills in the Philippines. Always remember that the best investment we could ever have is investing in ourselves first.
To our success, cheers!