Bonds Investing

How to Invest in Retail Treasury Bonds (RTBs) in the Philippines

Are you frustrated from earning too little from your savings account or time deposit?  Do you want to find a way to invest your money securely but with relatively higher interest rate?  Investing in Retail Treasury Bonds (RTBs) may be for you.


What are Retail Treasury Bonds (RTBs)?

Retail Treasury Bonds (RTBs) are fixed-income securities offered by the government to raise needed funds.  The bond maturity period ranges from 2 years to 10 years.  They are being sold primarily through the Bureau of Treasury.  You can also buy and sell bonds through banks via the secondary or resale market.  In the simplest of terms, this is government’s way of “borrowing” money from you.  🙂


How to invest in Retail Treasury Bonds (RTBs) in 3 simple steps?

As first time bond investors, my wife and I didn’t have a clue what a Retail Treasury Bond is, let alone have the courage to actually invest some of our hard earned savings.  Surprisingly, investing in RTBs is a very straightforward and simple process.  Here are the 3 simple steps we did.

Step 1: Go to your nearest bank and ask if they offer RTBs

Ideally, you would want to go through your local bank where you already have an existing savings account.  This will make it easier for you to transfer funds when you “buy” the bonds, and receive your annual “interest” earnings.  If you don’t have an existing account with the bank, they will ask you to open one.  :) 

Step 2: Fill-up the forms and have it notarized

There’s quite a number of forms to be filled up so just take your time. There’s also one document which needs to be notarized to make it legally binding.  In essence, this document tells you that the government “owes” you money for the duration of the term and obligated to pay you “interest” based on the “coupon rate”.

Step 3: Pay and wait for the interest to be credited through your bank account.

The payment will be debited from the bank account you provided in step 1 so it is important that you have enough funds in your account.  Once paid, all you have to do is wait for the interest to be credited to your account (usually) every quarter until the maturity date.  Once the bond matures, the principal will be returned to you and credited to your bank account.


Why invest in RTBs?

RTBs are attractive to investors for the following reasons:

  • Relatively safe – since it is backed by the “full faith and credit” of the government, it means the government has the power to tax its citizens just to pay YOU.  You lose money only when the government collapses and can no longer pay its debts.
  • Liquid – you can “sell” the bonds through the secondary market any time, even before its maturity.
  • Minimum investment – some banks offer RTBs at a minimum of only PhP 5,000 (around US $106).  Others, usually require at least PhP 100,000 minimum investment.  It’s different from bank to bank so ask around.
  • Regular interest income – since it is a fixed income, you receive the same amount of interest regularly (usually every quarter) until the bonds’ maturity.
  • Interest is higher than CDs / Time Deposits -  interest rates from year 1998 to 2009 ranged from a low of 5% to a high of 21%. 

Things to note when investing in RTBs?

  • The interest you earn is subject to tax (20% in the Philippines).
  • When the government “really” needs money to pay for its debts, RTBs are offered at very high interest rates (21% in 1998, during the Asian financial crisis). 
  • Generally, bonds with higher maturity period offer higher interest rates.
  • RTBs are normally “sold out” within 2 weeks after issuance.  You can check out the Bureau of Treasury website @ for the next schedule of RTB offering or watch out for announcements on the business section of daily newspapers.
  • Interest from RTBs is NOT compounded so you have to find another way to “reinvest” the interest earnings.

10 replies on “How to Invest in Retail Treasury Bonds (RTBs) in the Philippines”

@Mutual Funds, I agree. For some, however, the stock market volatility is too much…To them, with greater return comes greater risk, and “probable” greater downfall. This is especially true if you don’t know what you’re doing. 🙂

Bravo to you Allan. We always wonder how we can educate Filipinos in the area of investing. Tough to get good articles on the net explaining even the process of buying bonds. Your article stands out as one of the clearest explanation yet which in a way motivates the reader to take action and invest now. I guess, your personal experience is the best way to explain the buying and selling of bonds. Did you know that you can actually make more money by buying and selling the bond even before maturity. Hope you can write about that as well. Cheers!

RTB interest rates are ‘low’, 10% for a 10-yr term. That’s far cry from the 21% you metioned. I’m just wondering why would the Govt pay that much, 21%, when everytime the Govt offered RTB at this ‘low’ rate, people rush to buy RTB resulting in a sale 4 times the minimum size.

I have to agree…the interest rates at this time is quite low. It could be because the Philippine outlook is relatively positive compared to the time of coup de etat or unrest.

this one helped me a lot. thank u so much! ive been doing my research about RTBs so now all the things that i wanna know about it are all answered. Keep it up! All the best and Godbless! 🙂