Inquirer:
Every time I check with my bank for retail treasury bonds, I usually get “ubos na” is this a normal?
Guita of Colayco Foundation:
All Government Securities are offered to a general public and sold to the primary market (1st buyer). Only those who subscribe to the offer during the pre-sale period are able to invest in the GS. So in this case it may be true that there are no RTBs being offered as its already been sold.
However there is such a thing as the secondary market – this is where Government Securities that are already ‘running’ is traded. There are always government securities that are available but prices will be subject to the market.
If this is the case why do most banks say that it’s no longer available.
Here are a few realities:
1. RTBs (and other Government Securities) are not bank products.
2. The bank processes the investment and receives only a small processing fee from the Bureau of Treasury.
3. A bank branch’s performance is based on how big the accumulated value of its deposit accounts are.
Given these, the bank branches are not incentivized to offer, push or even facilitate your GS investment as you may remove your money from deposit accounts to invest. In times when it does offer the GS it usually does so to people who have a lot of investable funds. Why? The bank would have less administrative expenses in facilitating a big investment than many small ones.
Personally I wish the above isn’t the case as RTBs were designed for ordinary income earners! But this is what is going on and until there is a major change in the industry, we as investors will just have to be smart about how we go about investing:
1. Build a good relationship with your bank manager. He/she can notify you when government securities are available on the primary and secondary market.
2. Look for your bank’s Trust Department or sometimes it’s a separate company altogether. Get in touch with the trust department directly as they are the ones who facilitate investments in government securities.
3. Consider non-bank GSEDs (Government Securities Eligible Dealers). They may be more able to help you invest in GS as investing and not banking is their core business. A list of GSEDs can be found on http://www.treasury.gov.ph
