- Tokenized bonds boost investor interest, raising $270M in the Philippines.
- Digitalization roadmap aims to reduce risks and costs in bond transactions.
- Regional trend: Philippines joins neighbors in embracing tokenization.
In a historic move, the Philippines has successfully completed its maiden tokenized treasury bond sale, raising $270 million in funds. The sale, which garnered significant interest from investors, marks a significant step towards embracing digital technology in the country’s bond market.
The Bureau of Treasury (BTr) reported an overwhelming response from investors, with bids for the tokenized Treasury bonds (TTBs) reaching a total of 31.426 billion Pesos. This remarkable demand, surpassing three times the minimum offer of 10 billion pesos, underscores the strong appetite among institutional investors for peso-denominated tokenized assets. It also highlights the effectiveness of the government’s diversification strategy.
Tokenized bond oversight and investor accessibility
The Land Bank of the Philippines and the Development Bank of the Philippines (DBP) were appointed as issue managers for TTBs and will oversee the issuance. The TTBs are set to be offered with a one-year fixed rate.
The official offering of the tokenized bonds is scheduled to commence on November 20, with the issuance officially starting on November 22.
This landmark issuance of TTBs is part of the National Government’s Government Securities Digitalization Roadmap. It serves as a proof of concept for the broader application of distributed ledger technology (DLT) in the government bond market. The primary objective is to reduce risks and costs associated with traditional bond transactions.
Under the Treasury’s guidelines, qualified investors can borrow a minimum of PHP10 million (US$179,229) in tokenized bonds, with increments of PHP1 million (US$17,923). The deadline for submitting bids was around 12:30 p.m. on November 20, with the authorities set to announce the acceptance of proposals later on the same day.
Philippines joins the Tokenization trend
The Philippines joins a growing list of countries in the region that are exploring tokenized real-world assets. This development follows Hong Kong’s successful issuance of a HKD800 million (US$102.5 million) tokenized green bond earlier this year. Singapore, a notable financial hub, has also embraced blockchain technology, launching pilot initiatives in collaboration with institutions like JPMorgan, DBS Bank, and BNY Mellon.
Erwin Sta. Ana, BTr Deputy Treasurer, emphasized the importance of this proof of concept, stating that it serves as the starting point for the National Government’s broader agenda of democratizing investment through digital technology. The initiative aims to significantly reduce settlement risks and friction costs, ultimately fostering a financially inclusive local bond market.
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