Home > Pinoy Abroad > Top Stories Landbank offers high-yield deposit account for OFWs

Land Bank of the Philippines announced on Monday a deposit instrument designed for overseas Filipinos and their relatives to ease the impact of the shrinking peso equivalent of their offshore earnings.

Finance Secretary Margarito Teves, also Landbank chairman; Landbank president and chief executive officer Gilda Pico; and, administrator Marianito Roque of the Overseas Workers Welfare Administration introduced the new deposit product, known as the long-term negotiable certificates of deposit or LTNCD, to more than 150 Filipino business leaders in Dubai.

“This deposit product is designed to help overseas Filipinos and their families participate in the government’s savings mobilization program, as well as to help soften the adverse impact of the sharp peso appreciation on our OFWs as the LTNCD carries a higher yield compared to existing peso savings and time deposits," Teves said in a statement.

The peso-denominated LTNCD will be issued in P20,000-denomination in five- and-½ and 10-year tenors. It is covered by PDIC insurance up to P250,000 per depositor, and is withholding tax-exempt if held up to maturity.

The instrument carries an indicative yield of 6.25 percent for a five-and-½-year term, and 6.88 percent if held for 10 years. The final interest rates, however, will depend on the prevailing market rates at the time of issuance.

“Simply put, if an OFW invests P20,000 and holds it until the end of the five-and ½-year term, his investment will earn an interest of P8,056 if the market rate at the time of issuance is 6.25 percent.

If he holds it until 10 years, the interest can reach as much as P12,760," said Pico.

The target launching of the LTNCD will be in March 2008 through a public offering to be advertised in major dailies. This will be available in all branches of Landbank and Hong Kong and Shanghai Banking Corp. (HSBC) and designated selling agents.

Investors will be required to present proof of overseas employment such as OWWA Card, employment contract, pre-departure orientation seminar (PDOS) certificates, among others, to avail themselves of the LTNCD.

For OFW relatives who intend to invest, they should present proof of relationship with the OFW such as marriage contract and birth certificate. - Cheryl Arcibal, GMANews.TV

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