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By Maricel E. Burgonio Reporter
The Monetary Board (MB) cut the
amount of long-term deposit products Land Bank of the Philippines
plans to offer to overseas Filipino workers (OFW), a Bangko Sentral
ng Pilipinas (BSP) official said Wednesday.
BSP Deputy Gov. Nestor A.
Espenilla Jr. said the central bank’s policy-making body has
allowed LandBank to offer only P5-billion worth of long-term
negotiable certificates of deposit to OFWs, lower than the
lender’s proposal of P10 billion.
No reason was given for the
reduction in the amount on offer.
“The message here is to
encourage overseas Filipino workers to invest in savings with a
long-term instrument,” Espenilla told reporters.
The deposit product is a
peso-denominated certificate that will be issued in P20,000
denominations with maturities of 5 + and 10 years. It is covered by
state-run Philippine Deposit Insurance Corp. (PDIC) up to P250,000
and is exempt from withholding tax if investors opt to hold on to
the instrument up to its maturity.
The instrument carries a
higher yield compared with other existing savings and time deposit
products. The final interest rates will depend on the prevailing
market rates at the time of issuance.
OFWs and their relatives
may avail of the deposit products in the later part of March this
year.
Espenilla said LandBank
will offer two types of deposit instruments. The first is a zero
coupon type as the investor will be paid the interest on the 10th
year, while the second is an annuity type of deposit with the
interest paid in tranches in the last five years of the instrument.
LandBank’s initiative is
part of the government’s savings mobilization program, which is
aimed at encouraging OFWs to protect their earnings from the
peso’s appreciation.
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