The Philippine Government issues two kinds of government securities (GS): Treasury Bills and Treasury Bonds, so-called because it is the Bureau of the Treasury which originates their sale to the investing public through a network of licensed dealers. Government agencies, Local Governments and government-owned or controlled corporations may float securities but these are not labeled as Treasuries. Government securities are no longer certificated, they are known as "scripless", just like in USA, Canada, China and Korea. GS discount or coupons are subject to twenty percent final income tax which is withheld upon floatation of Treasury Bills or upon payment of the coupon for Treasury Bonds. No other tax is imposed on the secondary market buyer.
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Treasury Bills are government securities which mature in less than a year. There are three tenors of Treasury Bills: (1) 91 day (2) 182-day (3) 364-day Bills. The number of days are based on the universal practice around the world of ensuring that the bills mature on a business day. Treasury Bills are quoted either by their yield rate, which is the discount, or by their price based on 100 points per unit. Treasury Bills which mature in less than 91-days are called Cash Management Bills (e.g. 35-day, 42-day).
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Treasury Bonds are government securities which mature beyond one year. At present there are five maturities of bonds (1) 2- year (2) 5 – year (3) 7 – year 4) 10 – year and (5) 20-year. These are sold at its face value on origination. The yield is represented by the coupons, expressed as a percentage of the face value on per annum basis, payable semi-annually.
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Securities Dealer is a financial institution organized usually as a corporation or a partnership, whose principal business is to buy and sell securities, whether registered or exempt from registration, for the dealer’s own account or for the account of client/s. A securities dealer before dealing in securities is required to obtain a license from SEC pursuant to the Revised Securities Act.
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Government Securities Eligible Dealer (GSED) is a SEC-licensed securities dealer belonging to a service industry supervised/regulated by Government (SEC, Bangko Sentral ng Pilipinas or Insurance Commission) which has met the (a) P100 M unimpaired capital and surplus account; (b) the statutory ratios prescribed for the industry, and (c) has the infrastructure for an electronic interface with the Automated Debt Auction Processing System (ADAPS) and the official Registry of Scripless Securities (RoSS) both of the Bureau of the Treasury (BTr) using Bridge Information Systems (BIS), and acknowledged by the BTr as eligible to participate in the primary auction of government securities. A List of GSEDs are included in this Primer for ease of investors who wish to buy government securities.
view list of GSED

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Automated Debt Auction Processing System (ADAPS) is an electronic mode by which the National Government sells government securities to a network of GSEDs which are linked to the BTr through BIS every Monday for Treasury Bills and every second and fourth Tuesday for Treasury Bonds, whereby GSEDs tender their bids (both competitive and non-competitive) by keying-in the amount (minimum of P10.0 M) and yield of their choice (for a maximum of seven (7) competitive bids and one (1) non-competitive bid per tenor for any amount above P10.0 M) using a BIS terminal in the GSED office. Within seconds the bids are arrayed by the System in the terminals of the BTr. After the cut-off time of 1:00 P.M. the array is viewed by the Auction Committee which then decides on the award. The award is keyed-back to the respective terminal of GSEDs.


Two days after the auction, the government securities are credited to the Securities Principal Account of the GSED in the Registry of Scripless Securities (RoSS) and the Demand Deposit Account of the GSED at Bangko Sentral ng Pilipinas is debited in favor of the Treasurer of the Philippines for the cost of the government securities awarded to the GSED concerned. This completes the trade in the primary market (from the issuer the National Government to the licensed dealers or GSEDs). This is also known as origination of GS.
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Over-the-Counter (OTC) ) is another mode of originating GS for specific investors, namely, the Government Owned or Controlled Corporations (GOCC), the Local Government Units (LGU) and the Tax Exempt Institutions (TEI), e.g., pension funds, GSIS, SSS, etc.. It is non-competitive. The Over-the-Counter is open every day. The applicable yield rates for Treasury Bills issued to GOCCs/LGUs/TEIs shall be based on the rate of the immediately preceding Treasury Bill auction. For GOCCs, the rate shall be the lowest accepted yield rate, for LGUs, the weighted average yield rate and for TEIs, the yield shall be 90% of the weighted average yield rate. Treasury Bonds issued to GOCCs/LGUs/TEIs shall be priced based on the current market yield. The coupon rate for GOCCs and LGUs shall be based on the rate corresponding to the auctioned Treasury Bonds. The applicable coupon rate for TEIs shall be based on thew 90% of the coupon rate.
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Registry of Scripless Securities (RoSS) is the official Registry of absolute ownership, legal or beneficial titles or interest in GS (Treasury Bills and Treasury Bonds). Upon award of GS to a GSEDs at the auction, the securities award are electronically downloaded to the RoSS system. On issue date the Principal Securities Account of GSED are credited of the winning bids.


The GS trades are entered by both parties in their respective trading terminals using their confidential identification and password and to activate the system and authorize every transfer instruction between 9:30 a.m. to 1:30 p.m. The RoSS system checks the securities in the seller’s securities account and earmark these for transfer. The system then sends an electronic settlement file to BSP containing the amount to be debited and credited to the Regular Demand Deposit Account (RDDA) of the buyer and seller. Once settlement were processed, the BSP Philippine Payment and Settlement System (PhilPASS) will send back a file message that settlement were done and the RoSS system will now transfer the earmark securities from the seller securities account to the buyer securities account. A Posted message will then send back by RoSS to the system provided.


Securities and cash settlement of gs transaction to the secondary market is done via DvP on a Real Time Gross trade for trade basis. Cut-off time for peso funding in the Philippine Payment and Settlement System (PhilPASS) is until 2:00 p.m. All transaction which have been unsettled after the 2:00 p.m. cut-off time will be declared failed transaction and the earmarking on the company securities at RoSS will be lifted.
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Yield is the increment or interest on an investment in GS. It is the discount earned on Treasury Bills or the coupon paid to the holder of Treasury Bonds. Both the discount and the coupon are expressed as a percentage of the value of the GS on a per annum basis. Conventionally, the yield on longer dated GS are higher than the yields of shorter-dated GS.
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Competitive Bid is a tender to buy an amount of GS at a yield rate per annum that a GSED believes will wrest an award for the GSED by out-bidding other GSEDs in the primary market auction of GS
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Non-Competitive Bid is a tender to buy a specified amount of GS, by a GSED in the primary auction of GS, without indicating any yield rate, on the understanding that the award shall be at the weighted average yield rate of the competitive bids awarded at the same auction.
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Price Discrimination or English Auction is a method in which successful competitive bidders pay the price they have bid, and all the winning bidders may pay different prices.
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Uniform Price or Dutch Auction is a method of pegging a uniform coupon rate of a Treasury Bond at the stop-out level of arrayed amounts of bid with the corresponding yield rate tendered. Conventionally, the rate must be divisible by one-eighth of 1%.
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Settlement of Trades is the payment process both in the primary and secondary markets for government securities traded. Settlement of trades is undertaken by the BSP being authorized by GSEDs to debit their respective demand deposit accounts with the BSP in favor of the demand deposit account of the Treasurer of the Philippines or their counterparty GSED also with the BSP or vice versa.


Price of a GS is the value based on 100 points per unit. Treasury Bills are conventionally quoted in terms of the discount rate, while Treasury Bonds are quoted in terms of the coupon rate or the price. If a Treasury Bond is quoted in terms of its price, the price is either at a discount, at par, or at a premium and the coupon is a rate in relation to the maturity date of the bond.

Price of a GS is the value based on 100 points per unit. Treasury Bills are conventionally quoted in terms of the discount rate, while Treasury Bonds are quoted in terms of the coupon rate or the price. If a Treasury Bond is quoted in terms of its price, the price is either at a discount, at par, or at a premium and the coupon is a rate in relation to the maturity date of the bond.
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Auction