this story was taken from www.inq7money.net
URL: http://money.inq7.net/topstories/view_topstories.php?yyyy=2006&mon=04&dd=20&file=4
Posted: 1:51 AM | Apr. 20, 2006
Inquirer
THE Bangko Sentral ng Pilipinas (BSP, the central bank) has asked the Bureau of the Treasury to tighten the monitoring of the distribution of retail treasury bonds (RTBs), as it raised concern that only a few small investors were able to get the bonds.
RTBs are intended for small investors to boost small businesses and encourage investments by individuals. The minimum allowable investment is P5,000.
More than 80 percent of the RTBs issued by the government are held by big and institutional investors -- including banks, government-owned or -controlled corporations, and private corporations -- and that only less than 20 percent are held by small investors, BSP Deputy Governor Diwa Guinigundo said.
"Since these are retail bonds and are meant to be held by small investors, the Monetary Board would like the Bureau of Treasury to closely monitor and improve the distribution of RTBs to ensure that these are sold to small investors," Guinigundo said in a letter to National Treasurer Omar Cruz.
In response, The Bureau of the Treasury said that while the intention was to distribute the bulk of the retail bonds to small investors, demand from this sector was not enough.
"You can't give it all to retail investors because the absorptive capacity is not there," Cruz said.
But he clarified that the RTB holdings of small investors were not as small as the BSP suspected. He said many big investors redistributed the RTBs by selling them to small investors.
In September, the Bureau of the Treasury sold P44.37 billion worth of RTBs to help bridge the budget deficit while giving an investment opportunity to small investors.
The issuance followed a directive of President Gloria Macapagal-Arroyo to mobilize savings and investments. Michelle Remo, with INQ7.net
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