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November 28, 2023

Revolutionizing finance: Philippines unveils first tokenized Treasury bonds

In a pioneering move marking its 126th anniversary, the Bureau of the Treasury (BTr) unveiled the nation’s inaugural Tokenized Treasury Bonds (TTBs), a digital evolution of conventional government bonds.

This foray into cutting-edge financial instruments signals a notable stride toward enhanced financial inclusion, aiming to broaden access to the bond market for a wider segment of the Filipino population.

The TTBs are designed to facilitate more seamless tracking and management of these financial instruments.

Demand for these innovative bonds proved robust as the Bar received bids totaling P31.426 billion from qualified institutional investors or more than three times the P10 billion program. This prompted the Bar to adjust the size to P15 billion.

The bonds carry a 6.50% interest rate. Settlement for the bonds is scheduled for November 22.

To oversee the digital bonds, the BTr has implemented a dual registry system. This approach involves maintaining records in both the sophisticated DLT Registry and the conventional National Registry of Scripless Securities (NRoSS), with the latter serving as the primary registry for these bonds.

The introduction of TTBs underscores the BTr’s commitment to democratizing financial investments, particularly in government securities.

Finance Secretary Benjamin E. Diokno,emphasized that the bond tokenization program aligns with the National Government’s vision for an inclusive domestic capital market, streamlining investment processes and reducing costs, particularly for smaller investors.

Bangko Sentral ng Pilipinas Governor Eli Remolona highlighted the tokenization of treasury bonds as part of the BSP’s broader digital transformation and capital market development strategy.

The goal is to expand investment options for Filipinos, enabling them to grow savings through fixed-income investments while contributing to the nation’s economic growth. While the current focus is on institutional investors, plans are underway to extend this opportunity to retail investors in the future.