Invest and Get a Chance to Win Php1 Million with the Government’s “Premyo Bonds”

A lot of Filipinos are too scared to invest their money, in fear that they just might lose everything. Others don’t do it because they have no idea how and where to invest. Most don’t have extra money to spare while many do have the money but would rather spend it on things they can enjoy at the moment, such as food and vacations.

But what if there’s an option for us to invest our hard-earned cash while also having a chance to win something to use for fun? Well, that’s where the government’s “Premyo Bonds” come in.

Many of us are already familiar with Retail Treasury Bonds (RTBs) or the so-called “T-Bonds” offered by the government, but the Philippine government recently rolled out “Premyo Bonds”.

What are Premyo Bonds?

Premyo Bonds are special investments offered by the National Government to the public. This is done to promote financial inclusion and to provide an opportunity for investors to receive a larger return on their investment through the cash as well as non-cash reward.

Upon payment of the principal, the investor is eligible for the raffle draw. While Selling Agents may charge notarial fees, with the amount depending on the Selling Agent’s existing rules, there are no other fees collected from investors.

The pricing of the Premyo Bonds is based on prevailing BVAL rates for 1-year bonds. This is the accepted benchmark in the country.

The BTr explained that the interest rate of the Premyo Bonds shall be determined using the 1-year BVAL on 22 November 2019, less the cash reward ratio. The cash reward ratio is 0.625% gross, which will be used to determine the cash reward pool. The interest rate is fixed and will be calculated on a 30/360-day basis.

Invest and Get a Chance to Win Php1 Million with the Government’s “Premyo Bonds”
Photo credit: BTr

Interest rate payments for the Premyo Bonds will be paid quarterly in arrears on the last day of each 3-month interest period. If the Interest Payment Date is not a Business Day, interest will be paid on the next succeeding Business Day, without adjustment in the amount to be paid. The Premyo Bond will stop gaining interest on the Maturity Date.

The proceeds of the Premyo Bonds will go directly to the Government’s coffers. These collections will be used to fund economic programs of the government, including but not limited to infrastructure development and social services.

The Premyo Bonds are a direct obligation of the Republic of the Philippines; thus, the principal investment is assured via the Bureau of the Treasury (BTr). The cash prizes are also assured by the BTr. However, the non-cash prizes are not assured by the BTr; instead, these are guaranteed by the participating institutions. Currently, there are three participating institutions: DoubleDragon, Megaworld, and Vista Land.

The Premyo Bonds will have a tenor of 1 year. The maturity date will be on December 18, 2020. Because Premyo Bonds mechanics are based on the final issue size of the tranche, pre-termination is not allowed.

Premyo Bonds are similar to RTBs in that both pay quarterly interest payments. However, an investment in the Premyo Bonds provides investors with a chance to win up to Php1,000,000.00 every quarter, plus a non-cash reward for the 1st, 2nd, and 3rd quarter. This which was not present in the previous RTBs. Moreover, whereas RTBs are tradable instruments, Premyo Bonds are not tradable in the secondary market.

Still, many are more excited at the prospect of investing in Premyo Bonds because of the prizes being offered!

Winning with Premyo Bonds

The Premyo Bonds are scripless in form and can be bought at a minimum denomination of Php500.00 and integral multiples of Php500.00 thereafter.

And while these bonds could not be traded in the secondary market, they are extra special in that they offer investors a chance to win up to Php1 million in cash! Moreover, there are other major prizes to win, including non-cash rewards such as a condo unit or a house and lot from the sponsors, DoubleDragon, Megaworld, and Vista Land.

All investors of the Premyo Bonds are eligible for the raffle draw. What’s even more exciting is that the Grand Prize Winner of Php1,000,000.00 will also receive the non-cash reward of the Premyo Bonds for the 1st, 2nd, and 3rd cash rewards draws.

Invest and Get a Chance to Win Php1 Million with the Government’s “Premyo Bonds”
Photo credit: Business World

Aside from the Php1 million cash prize and the non-cash prizes that include the real properties offered by the sponsors, all investors are also eligible to win Php100,000 (10 winners) in the 2nd tier and Php20,000 (50 winners) in the 3rd tier.

All cash rewards are net of applicable taxes. However, non-cash rewards are subject to an 8% donor’s tax plus other expenses, including registration and transfer fees as well as documentary stamp tax (0.75%).

Every placement (worth Php 500.00) is equivalent to and entitles the Bondholder to 1 Bond Unit. Each Bond Unit is part of the cash rewards draw.

Each Bond Unit will be assigned a 20-character Electronic Rewards Number (e-RN). The e-RN will be based on the investor’s NRoSS Account Number (15 characters), with an additional 5 characters corresponding to the number of Premyo Bonds units eligible for the cash rewards.

Five days before the draw date, the BTr will provide the masterlist of investors to the Premyo Bond Facility Agent, Land Bank of the Philippines Trust Banking Group. The Premyo Bond winners shall be determined via a randomized electronic raffle draw.

Each raffle draw shall be made by the official Rewards Committee comprised of 2 officials from the BTr, the Trust Officer of the Premyo Bonds Facility Agent (LANDBANK – Trust Banking Group), Officer of the DBP, and an official or representative of FINEX Academy. The draw should also be supervised by at least 1 representative from the Commission on Audit (COA).

While there is no limit to how much anyone can invest, a maximum of 20,000 Premyo Bonds units (equivalent to an investment amount of Php10,000,000.00) shall be eligible per NRoSS account for inclusion in each cash rewards draw. But if you want to invest more than that amount, you can always just open another NRoSS Account.

It is possible to buy Bond Units from different sales agents and to have different NRoSS Account Numbers. However, there is no need to segregate Premyo Bonds if you’re investing less than the ceiling amount for raffle entries because the number of entries is determined by the total investment, not the number of NRoSS Accounts.

There is also no limit to the number of times you can win in the Premyo Bonds. All investors, including previous winners, have a chance to win every quarter.

If you’re wondering why the government is offering Premyo Bonds aside from the regular treasury bonds and similar products, this is done to encourage more people to invest. The non-cash prizes are also offered to add more enticing prizes for the public.

Who Can Invest in Premyo Bonds?

Technically, anyone and everyone can invest in Premyo Bonds, even kids! But for minors, Premyo Bonds placements may be placed under an ITF or “In Trust For” account, subject to the documentary requirements of the Trust entity acting as the Trustee.

Retirees are also welcome to invest in Premyo Bonds.

Overseas Filipino workers (OFWs) will find it easy to invest in Premyo Bonds, especially if they already have eligible bank accounts opened in the Philippines through partner banks. All they have to do is visit their preferred bank. It might be possible to do this through a remittance partner, but that’s subject to verification.

If the OFW needs to open a new bank account outside the Philippines, all the signature cards have to be checked and authenticated by the representative of the Philippines in the country which the said document is executed.

Invest and Get a Chance to Win Php1 Million with the Government’s “Premyo Bonds”
Photo credit: Business World

Individuals can invest in Premyo Bonds, but partners (with joint accounts), cooperatives, trust funds, and any group composed on individuals as ultimate beneficial owners are also eligible for this special investment.

Premyo Bonds can be purchased using “and/or” accounts as long as nominated bank account for crediting of interest and principal investment has the same “and/or” account name.

Can foreigners also invest in Premyo Bonds? Definitely! As long as they have a Philippine Peso deposit account (savings/current) with one of the partner banks, foreigners are allowed to invest in Premyo Bonds. They are also eligible to the cash prizes but do take note that foreigners are not allowed to own properties in the Philippines. Thus, their non-cash prize might be forfeited, in the event that they win.

This brings us to a popular question – can prizes be transferred to someone else, particularly if the winner is not allowed to own property due to certain issues, including the rule on foreigners not allowed to own land in the Philippines? The answer is no. Prizes (both cash and non-cash) can only be claimed by the winner.

Due to the fact that the Premyo Bonds are non-transferable, investors could not use this as collateral for a loan or other financial obligations.

But winners will have full rights and ownership to their prizes after formally receiving such and processing the ownership documents. Only after then can you dispose of the prizes, in any way you want.

Investments in Premyo Bonds are accepted until December 13, 2019.

How to Invest in Premyo Bonds?

It is actually easy to invest in Premyo Bonds. Individual investors are required to have an existing Peso account with any of the Selling Agents. This bank account will be designated by the investors as their Settlement Account where interest payments and the principal, upon maturity, will be credited.

To start investing, simply visit one of the banks recognized as Selling Agents (DBP, LANDBANK, BDO, China Bank, Metrobank, and FMIC) and let the customer relations officer know you are interested in purchasing Premyo Bonds. If you don’t have an account with any of these banks, you can simply open one by submitting the necessary documents and filling out the application form.

After opening an account with your preferred bank, you have to complete a series of forms. The Application to Purchase Form and your principal payment will be collected, but the Selling Agent might also ask you to fill out the Customer Suitability Assessment Form, Special Power of Attorney, and Investor’s Undertaking, if applicable.

You also need to present a valid government-issued ID. It is also possible that the Selling Agent will collect fees for the notarization of your documents.

Once the Selling Agent receives confirmation of your application and principal deposit, the Premyo Bonds will be registered under the BTr’s National Registry of Scripless Securities (NRoSS) platform. If you already have your own NRoSS, let the sales representative know. If you don’t have one yet, your Selling Agent will be responsible for creating your very own NRoSS Account. This will be used to place your security upon purchase of the Premyo Bonds.

Take note of your NRoSS Account number. This will be used as your reference number to the cash and non-cash reward portion of the Premyo Bond offer. This will also be required in various transactions relevant to the account, including Confirmation of Registry Account Opening, Confirmation of Sale, and Summary of Transaction.

Once you opened the account and paid the principal investment, you can pick up the Confirmation of Sale from the respective branch of your Selling Agent within 30 banking days from the issue date of the Premyo Bonds.

But what if the bank closes? You have nothing to worry about because the Premyo Bonds are obligations of the National Government. Thus, the investment is unaffected by the entity that acted as a Selling Agent, even if that particular bank is closed while the investment is still active. All you have to do is nominate a new settlement account in another bank (as long as the bank is a partner Selling Agent) so that the interest and principal payments can continue to be paid.

Payments of the principal can be done through various means, including via cash, check (including manager’s check and cashier’s check), debit authority from CASA, or even any combination of the available payment options.

How to Verify and Claim Premyo Bonds Reward?

On each draw date, the BTr will publish the list of winners (through their NRoSS account number) on its official website, The winners will also be notified by the Premyo Bond Facility Agent thru their Settlement Bank within 5 days from the draw date.

Winners of the Php1 million cash prize can claim this through any Land Bank of the Philippines Branch. This will be paid out via Manager’s Check and released with the presence of a BTr representative.

The winner is required to submit 1 valid and unexpired Philippine government-issued ID that bears his/her name, signature and photo. The winner should also bring the Notification Letter sent by the Premyo Bond Facility Agent through the winner’s Settlement Bank.

If the winner of the Php1 million cash prize could not personally claim the reward, an authorized representative can do so, subject to the presentation of a Special Power of Attorney designating the representative/s as the person to collect the prize. The authorized representative is required to present his/her valid and unexpired Philippine government-issued ID as well as that of the winner. The Notification Letter should also be submitted.

Once these requirements are submitted, the Premyo Bonds Facility Agent will start the verification process, with the details of the process to be included in the Notification Letter sent to the winner. You have up to 180 days from the draw date to collect the Php1 million cash prize. After that deadline, the prize will be forfeited in favor of the BTr.

The cash rewards of the Php100,000.00 and Php20,000.00 will be credited directly to the settlement account of the winners.

Meanwhile, the non-cash rewards are not convertible to cash. But as mentioned above, these can be sold or disposed of as you please, once claimed and the ownership transferred to your name. To collect the non-cash prize, the winner will have to go through the Escrow Agent by donation directly by the Developer (Donor) to the Winner (Donee) depending on the Status of the property (if RFO or pre-selling), the BTr explains.

Other Issues and Relevant Questions

Some people are wondering what happens to the Premyo Bonds in the event of the investor’s passing, particularly because the prizes are non-transferrable. Well, if the owner passes, the beneficiaries may claim the principal amount and the proceeds, as long as they can provide the necessary documents.

This is subject to the laws on succession, unless the investor had a last will and testament designating certain individuals as beneficiaries. Just like money in bank accounts, real property, and other investments, this is subject to estate taxes and other fees. The bank might also request for other documents, including proof of kinship.

Interest rate payments are done on a quarterly basis. It is not possible to request the Selling Agent to change the schedule to a monthly basis.

Many might question why corporate issues, such as Petron retail bonds, have better interest rates. According to the BTr, this happens because of several factors, including the fact that corporations have to pay investors a premium rate due to the higher security risks involved in their investments. Because corporations typically have higher credit risks to ideally grow investors’ money faster, there is also a higher expected return.

Plus, the BTr pointed out that most individuals will not be able to start investing their money for as low as Php500! Also, government issues like Premyo Bonds have the lowest risk among other investments. Thus, it is also expected to yield a lower income than corporate issuances.

Joy Adalia

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