Angeles U.

Comendador MACC 224

Mr. Daniel Nemesis Espina, CPA November 28, 2019

1. What is Bond?

Bonds are loans made to large organizations. These include corporations, cities, and
national governments. An individual bond is a piece of a massive loan. That’s
because the size of these entities requires them to borrow money from more than one
source. Bonds are a type of fixed-income investment. The other types of investments
are cash, stocks, commodities, and derivatives.

2. What bonds are present in the Philippines and where to buy them?

Maturity-based bonds
Bonds categorized based on the length of time it will mature.

 Treasury Bills (T-bills) – Bonds that mature in less than 1 year (short term). The
most common tenors (length of maturity) for T-bills are 91 days, 181 days, and
364 days.
 Treasury Bonds (T-bonds) – Bonds that have tenors of more than 1 year. The
most common maturity lengths for T-bonds are 2-year, 5-year, 7-year, 10-year,
20-year, and 30-year bonds.

Issuer-based bonds

 Treasury Securities – Bonds issued by the Bureau of Treasury

 Government Bonds – Bonds that are issued by various government agencies
like HDMF, Government National Mortgage Association (GNMA), Federal
National Mortgage Association, and others.
 Municipal Bonds – Bonds issued by the local government units (LGUs).
 Corporate Bonds – Bonds issued by public and private companies.

Most banks in the Philippines offer various fixed income products like Retail Treasury
Bonds, T-Bills, Fixed Rate Treasury Notes (FXTNs), Dollar Sovereign Bonds, and Dollar
Corporate Bonds, among others. Some of the more popular banks known to offer
bonds and other fixed-income products include:

 Security Bank
 BDO
 BPI
 Unionbank
 PNB
 Metrobank
 RCBC
 Landbank
 Bank of Commerce
 China Bank
 Development Bank of the Philippines (DBP)
 PB Com
3. What are the average interest rates prevailing for these bonds in the Philippines?
(You can browse the website of the Philippine Dealing Exchange Corporation or
www.pds.com.ph)

Latest
Week Previous
Week

1. Treasury Bill Rates (Auction Date)

(Auction Date: November 18, 2019)

91 - Day 3.168 ..
182 - Day 3.249 3.198
364 - Day 3.501 3.513

2. Coupon Rates on Fixed-Rate Treasury Bonds 2

(Auction Date: November 12, 2019)

7 - Year 6.250
10 - Year 6.875

4. The government is planning on issuing Prize bonds in the country. What are its
features and which country/countries are currently issuing those? How and where
to buy them if ever issued?

A Prize Bond is a lottery bond, a non-interest bearing security issued on behalf of

the Irish Minister for Finance by the Prize Bond Company Limited. Funds raised are
used to offset government borrowing and are refundable to the bond owner on
demand. Interest is returned to bond owners via prizes which are distributed by means
of random selection of bonds. Prize Bonds are also offered in Pakistan by the Ministry
of Finance, and in the UK, under the name Premium Bonds. Prize Bonds are available
in units of €6.25. There is a minimum purchase of 4 units costing €25. Prize Bonds are
entered into a weekly draw with prizes ranging in value. Weekly prizes range from €50
to €50,000, with a €1m prize twice a year. Thousands of cash prizes are awarded each
week. You can choose how to receive your prizes. All customers who currently receive
prizes into their bank account will continue to do so.

5. Do you think Filipinos will be attracted to invest in prize bonds? Why or why not?

"Premyo Bonds Para sa Bayan intends to pull in small savers and our
overseas kababayan (countrymen) to share in our nation building. Existing deposit
account holders can order online in the comforts of their home," - National Treasurer
Rosalia de Leon. It is a fact that investing or saving is not a thing in most Filipinos’s
vocabulary. Lottery – like how prize bonds work - a mix of thrill and entertainment to
Filipinos for a long time already. By just explaining the basics of investing and its
benefits, then the Filipinos will love it especially the work and play culture of this new
way of investing method.
6. What is a stock?

Stocks are a type of security that gives stockholders a share of ownership in a

company. Stocks also are called “equities.”

7. How to invest in stocks?

 Decide how you want to invest in stocks
 Open an investing account
 Know the difference between stocks and stock mutual funds
 Set a budget for your stock investment
 Start investing

8. What is initial public offering?

An initial public offering (IPO) refers to the first time a company publicly sells shares of
its stock on the open market. It is also known as "going public."

9. What is the role of the Philippine Stock Exchange in helping individuals to buy and
sell stocks in the country?

Transparency proceeds from the assumption that the investor can only make
informed and intelligent information about the particular sock he wants to buy. The
PSE requires listed companies to disclose timely, complete and accurate material
information to the Exchange and the public on a regular basis. Such information
would include stock price information, corporate conditions and developments
which tend to affect stock prices like dividend, mergers and joint ventures, and the
like.

10. Give the current economic and political situation in the country, do you think it is
good to invest in stocks? Why or why not?

"Some people still have stereotypes of stock market investors which are debunked
by our latest investor profile report. Investors nowadays are younger and a
significant number of them are women. It also shows that it is not necessary to have
a big salary to be able to invest, what is important is to know how to set aside
money for investment," Ramon Monzon, PSE CEO. People and the younger
generation are getting wiser than yesterday, so it is good to invest in the stock
market.