Landbank offers deposit instrument for OFWs

The Land Bank of the Philippines (Landbank) is offering a deposit instrument for overseas Filipino workers (OFWs) and their beneficiaries to help them cope with the steady appreciation of the peso against the dollar.

The state-owned financial institution introduced long-term negotiable certificates of deposit (LTNCD) for Filipinos abroad and their beneficiaries.

“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 instrument carries a higher yield compared to existing peso savings and time deposits,” Finance Secretary and Landbank chairman Margarito Teves said.

The peso-denominated instrument will be issued in P20,000 denomination in five and 1/2 and 10-year tenors. It is covered by the Philippine Deposit Insurance Corp. (PDIC) up to P250,000 per depositor, and is exempt from withholding tax if held up to maturity.

Landbank also said that the instrument carries an indicative yield of 6.25 percent for a five-and-1/2-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.

“If an OFW invests P20,000 and holds it until the end of the five-and-1/2-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,” Landbank president Gilda Pico said.

Landbank is eyeing to launch the instrument in March through a public offering. It will be available in all Landbank branches, HSBC and through designated selling agents.

Investors will be required to present proof of overseas employment to avail of the instrument. Their relatives who intend to invest should present proof of relationship with OFW such as marriage contract and birth certificate.

This developed as the bank also announced the launch of its cash card for overseas Filipinos.

With the card, Filipino workers in the Middle East can now use their SMART mobile phones to send money home, paying a bank charge of as low as P5 per transaction. This excludes the roaming charge of P20 and a fee of P2.50 which is charged to the sender’s airtime load per transfer.

“The launch of the Landbank OFW cash card is a strong manifestation of government’s commitment to better serve the needs of OFWs. There is no doubt that Landbank’s strong countryside network combined with SMART’s advanced mobile commerce technology can lead to more opportunities to enhance our services to our Overseas Filipinos,” Teves said.

The cash card is an electronic debit card that is linked to a mobile phone with a SMART aim card. The cash card will utilize the SMART Services Hub, SMART’s global financial and telecommunications services model which will enable telcos and banks abroad to offer mobile phone-based remittances to Filipino migrants.