OFW: How To Buy Treasury Bills?

For OFWs looking for short-term government-backed investments, Treasury Bills offer one of the simplest entry points. Issued by the Philippine government through the Bureau of the Treasury, these securities carry tenors of 364 days or less and require a minimum placement of PHP 50,000. The appeal for overseas workers is straightforward: the principal is backed by the government, interest is paid upfront, and the entire process can be managed remotely through a bank.

What makes T-bills worth considering now is the interest rate environment. Unlike savings accounts where rates can shift any time, T-bills lock in the prevailing market rate for the entire tenor. For an OFW who may not be around to actively manage money, that fixed-income stream, however short-term, removes the need to monitor rate changes. The interest is also paid in advance, meaning the investor receives the interest at purchase and the full face value at maturity — a structure that provides immediate cash flow rather than waiting for periodic payouts.

Three Tenors, One Structure

T-bills belong to a broader category called fixed income securities — investments that pay a predetermined return over a set period, with the full principal returned at maturity. Unlike stocks, the income stream does not fluctuate with company performance or market sentiment. For an OFW who may not have time to research individual companies, that predictability is a real advantage.

Each tenor serves a different cash-flow need. An OFW sending money home quarterly for a family expense might prefer the 91-day version. Someone building a six-month emergency fund could use the 182-day bill. The 364-day option fits those who want a near-term government-guaranteed vehicle without committing to the multi-year lock-up of Retail Treasury Bonds. The right choice depends entirely on when the money will be needed and what rate the market offers at the time of purchase.

What Changes the Return

The headline rate on a T-bill is not the final amount an investor pockets. A 20% final withholding tax is applied to interest earnings for most individual investors, unless the account belongs to a tax-exempt institution. That tax is deducted at source, so there is no separate filing requirement — but it does reduce the effective yield.

Consider an OFW who buys a PHP 50,000 91-day T-bill at a rate of, say, 5% per annum. The gross interest for the full year would be PHP 2,500, but for 91 days it would be roughly PHP 312. After the 20% withholding tax, the net interest drops to about PHP 250. That is still more than most passbook savings accounts would pay on the same amount over three months, and the principal is government-guaranteed. The exact rate changes with each auction, so the actual figure will vary.

Another factor that changes the outcome is timing. T-bill rates are set through regular auctions conducted by the Bureau of the Treasury, and they move with market conditions. An OFW who buys when rates are higher will lock in a better return for the duration. Someone who purchases just before a rate cut (or in a rising-rate environment) will see the opposite. There is no way to predict the direction with certainty, which is why many investors stagger purchases — buying at different auctions to average out the rates.

Liquidity is also worth understanding. T-bills can be sold before maturity on any banking day, provided there is a buyer in the secondary market. Government securities generally have good liquidity, but the seller may realize a price above or below the face value depending on prevailing rates. If rates have risen since purchase, the security may trade at a discount; if they have fallen, it may trade at a premium. For OFWs who might need to access funds early, this matters — the settlement amount will differ from the face value due to accrued interest, taxes, and applicable fees.

Documents, Processes, and Fine Print

Buying T-bills as an OFW requires a bit of paperwork, but the process is well-defined. The documents typically requested include a Special Power of Attorney (SPA) if someone else will transact on the investor’s behalf, an Investor’s Undertaking, a Letter of Instruction (LOI) for Peso Fixed Income Securities, and a Client Suitability Questionnaire (CSQ). Additional requirements may be imposed by the specific bank or custodian.

Who Can Execute the SPA

For OFWs who cannot appear in person, the SPA is the critical document. It must authorize a trusted representative in the Philippines to sign the purchase documents and manage the account. The SPA itself may need to be consularized or notarized at the Philippine embassy or consulate in the host country, depending on the bank’s requirements. This step is where many OFWs hit delays, so preparing the SPA early — before a specific auction date — is essential.

The Auction Schedule Matters

T-bills are not available for purchase every day. The Bureau of the Treasury holds regular auctions, and investor orders must be submitted through a broker bank — usually several days before the auction date. An OFW needs to coordinate with the bank’s fixed-income desk, submit the Letter of Instruction, and ensure funds are available for settlement. Missing the cutoff means waiting for the next auction.

Early Termination Has Costs

If an OFW needs to sell a T-bill before it matures, the process must be coursed through the broker bank’s salesman, and the client must submit all required documents including the original Confirmation of Sale and a Letter of Instruction. The sale price will depend on prevailing market rates, and there is no guarantee that the full face value will be recovered. Selling in a rising-rate environment typically means a discount, since newer T-bills offer higher yields.

Collateral Use

One lesser-known feature is that T-bills can be used as loan collateral. Banks generally accept government securities at a certain percentage of face value, depending on the bank’s credit guidelines and the type of security. This could be useful for an OFW who wants to keep the investment intact while accessing cash for an emergency or a major purchase — without triggering an early sale.

Steps for OFWs to Start Buying T-Bills

Choose a Broker Bank and Open a Fixed-Income Account

Not all banks offer T-bill purchasing services for individual investors. OFWs need to confirm with their bank — ideally one with an established fixed-income desk — whether retail T-bill investments are available. Some banks require a separate investment account or a signed Client Suitability Questionnaire before allowing any transaction. This step should be completed well before the first auction the investor intends to participate in.

• 1
  Confirm Bank and Account Eligibility

  Contact the bank’s fixed-income or treasury unit to verify that they offer T-bill purchases for individual clients and to ask about specific OFW requirements, including SPA execution.

• 2
  Prepare Documents While Abroad

  Execute and notarize or consularize a Special Power of Attorney naming a representative in the Philippines. Complete the Investor’s Undertaking and Client Suitability Questionnaire.

• 3
  Monitor Auction Dates and Submit the LOI

  Check the Bureau of the Treasury auction calendar. Submit a Letter of Instruction specifying the tenor and amount at least a few banking days before the auction. Ensure the settlement funds are in the account.

• 4
  Receive Confirmation and Track Maturity

  After the auction, the bank will provide a confirmation of the purchase. Track the maturity date — the proceeds should automatically be credited to the account, or reinvested if the investor chooses.

Reinvesting at Maturity

When a T-bill matures, the full face value returns to the investor. OFWs who do not need the cash immediately can reinvest in the next auction. Some banks offer automatic rollover options, though terms vary. Staggering purchases across different tenors — known as laddering — ensures that some cash becomes available at regular intervals, providing both liquidity and exposure to changing rates.

What If Rates Go Up After Purchase

This is the main risk: locking in a rate that later looks low compared to newer issuances. For a 91-day bill, the exposure is only three months, so the opportunity cost is limited. For a 364-day bill, the investor is locked in for nearly a year. OFWs who expect rates to rise may prefer shorter tenors, accepting a lower rate now in exchange for the ability to reinvest sooner at potentially higher rates. There is no right answer — it depends on the investor’s outlook and cash-flow needs.

Frequently Asked Questions About OFWs and T-Bills

Before You Invest, Verify the Details

T-bills offer OFWs a straightforward, government-backed way to earn a fixed return on short-term savings without active management. The minimum PHP 50,000 threshold, three tenor choices, and upfront interest structure make them easy to understand. But the rate, the tax, and the auction schedule all affect the final outcome. Before wiring money from abroad for a purchase, confirm with the bank which documents are required, whether an SPA needs consularization, and what the cutoff dates are for the next auction.

If this was useful, you might also want to read how OFWs can open a PERA account.

Sources

Maximizing Returns on Philippine Investments — A deeper look at how T-bills and other fixed-income instruments compare for different investment horizons in the local market.

Setting Achievable Investment Goals in the Philippines — Practical guidance on aligning short-term government securities with broader financial objectives.

Treasury Bills – Security Bank. Security Bank, n.d.