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THE Department of Finance (DOF) said Monday it will launch in Hong
Kong this month long-term peso denominated debt papers aimed at
encouraging overseas Filipino workers (OFW) to lend the government
money by investing in these IOUs.
“We’re launching the long-term peso
denominated certificate in March in Hong Kong. The dollar
denominated would probably come in a little later,” Finance
Secretary Margarito B. Teves told reporters.
The finance department is selling these OFW
bonds as a way of slowing down the appreciation of the peso, as the
debt instrument would soak up strong dollar inflows, particularly
remittances from abroad.
The Bangko Sentral ng Pilipinas and the national
government earlier agreed to offer retail Treasury bonds to OFWs
worth at least $500 million starting this year.
The OFW community would be encouraged to buy the
bonds whose proceeds will help underwrite the country’s
multibillion- peso infrastructure buildup program.
Because the IOUs are denominated in US dollars,
its indicative interest rate is around 4 percent a year, tax-free
over its 2.5-year term.
Since OFWs are considered non-residents, the
bonds they purchase may be exempt from taxes except that levied on
foreign currency deposit earnings that are lower than the peso
income tax rate.
-- Chino S. Leyco
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