(Bloomberg) -- The Philippines is ramping up the sale of government securities for as low as 500 pesos ($9) in a bid to broaden the investor base and help fund one of Asia’s fastest-growing economies.
The Bureau of the Treasury has tapped a major virtual asset company and the nation’s top e-wallet firm to mainstream bond investing.
“We only have less than half a percent of our country exposed to the bond market. The longer-term vision is to bring that maybe at least to as much as the banking penetration of 60%,” Nichel Gaba, founder and CEO of Philippine Digital Asset Exchange, or PDAX, said in an interview on Thursday.
PDAX, which has over 2 million users, is providing the technology for the bond registry while its unit Bonds.ph is acting as dealer. Its platform already allows investors to buy Treasury bills for a minimum 500 pesos.
The Treasury bureau has also enlisted fintech company GCash to sell government debt securities on its platform starting next year. A unit of Globe Telecom Inc., GCash has around 94 million users.
Bond sales to retail investors are a big source of financing for the Philippine government, which must raise 2.55 trillion pesos ($43 billion) from foreign and local sources next year. The Treasury bureau offered 310 billion pesos in debt securities in the current quarter.
Before allowing the sale of bonds in units of 500 pesos, the government offered debt securities in denominations of as low as 5,000 pesos.
Gaba said the bonds will be maintained in the Distributed Ledger Technology Registry, a blockchain-based registry owned by the Bureau of the Treasury. The DLT Registry will run parallel with the National Registry of Scripless Securities or NRoSS.
Last year, the government sold tokenized bonds for the first time to institutional investors, with officials hoping at that time that they would be eventually offered to retail buyers.
“In terms of value, it’s hard to imagine that the mass retail segment will fund the Republic in the short term. But this is probably the most obvious way to start,” Gaba said.
--With assistance from Cecilia Yap.
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