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Banker: T-bills are safe investments for OFWs


To take advantage of the increasing remittances from abroad, the Philippine National Bank (PNB) has offered various investment products, such as government Treasury Bills, to overseas Filipino workers (OFWs) in Saudi Arabia. In a symposium in Jeddah on August 24, PNB officials based in the Kingdom of Saudi Arabia, assured OFWs that investment in T-bills is safe because the Philippine government is the guarantor, Jeddah-based Arab News reported in its online edition on Wednesday. “T-bills are highest yielding, risk-free investment instrument and are fully and unconditionally guaranteed by the government through the Bangko Sentral ng Pilipinas (BSP)," explained Modesto F. de Guzman, head of the PNB in the Kingdom’s Eastern Province. The BSP has authorized the PNB to sell T-bills in the Middle East. De Guzman said that investments in T-bills used to be an exclusive territory of banks and big companies as minimum deposit was P1 million. Aiming to tap the OFW market, the Philippine Bureau of Treasury in 1998 began reducing the minimum deposit that now stands at P50,000 ($1,085) with 4.85 percent interest in one year. T-bills are government “debt instruments" issued to investors for the purpose of generating funds needed to finance outstanding obligations. T-bills mature in 91, 182 or 364 days. Aside from T-bills, PNB officials also introduced the Dollar Mint plan, which requires an initial deposit of $5,000. This would generate 3.5-percent interest in a year. Also in that symposium, De Guzman introduced other financial services and products for OFWs that PNB pioneered such as the “Dollar Door-to-Door Delivery," “Peso Door-to-Door Delivery," “SSS Remittance of Loan Amortization and Members Monthly Contribution," and other instant PNB products. PNB officials also introduced various loan facilities such as car loan program and housing loan plan, among other services. De Guzman said the PNB road show first took off in Dubai, then a similar gathering was held in Riyadh recently. Consumer survey Results of the first-ever nationwide Consumer Expectations Survey released by BSP last March showed that only 2.3 percent of households receiving OFW remittances used the money they get from relatives overseas on investments. Recipients spent most of their earnings on food and other household needs, while 7.2 percent set aside part of it for savings. BSP earlier reported that remittances from OFWs reached a record $12.8 billion in 2006, while the January remittances rose by 20 per cent to $1.1 billion. Remittances this year has been projected to reach $14 billion. More than one million Filipinos left for overseas employment in 2006, the highest level recorded by the Philippine Overseas Employment Administration (POEA). Remittances from OFWs have been keeping the Philippine economy afloat. Despite continued assertions by the government that the economy is improving, consumers across the Philippines remain bleak about the future, as concerns over the upcoming national elections overshadowed the macroeconomic achievements of the current administration. Investment frauds Meantime, a rash of investment scams that has milked millions from unsuspecting Filipino investors has prompted President Gloria Macapagal Arroyo to establish a Cabinet-level task force to address the problem. Through Administrative Order 185, a task force for investor protection was created to monitor investment schemes, including real estate projects, especially those marketed to the public and overseas Filipino workers. The Department of Finance leads the group, which includes representatives from the Department of Trade and Industry, Securities and Exchange Commission, National Bureau of Investigation and the Housing and Land Use Regulatory Board. The Justice department will act as a consultant, but having the power to prosecute, it should maintain “standard distance" from investigators. - GMANews.TV

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