$500 million OFW bonds launched for the government
Posted on April 8th, 2010
The sale of $500 million in retail treasury bonds (RTBs) has been launched by the government. This investment instruments are intended for overseas Filipino workers. They are the Fixed Rate Multicurrency Retail Bonds and they will be auctioned on April 20 and will be offered to investors on the same day until April 27, according to Roberto Juanchito Dispo, executive vice-president of First Metro Investment Corp. (FMIC), one of the issue manager.
BPI Capital Corp., Development Bank of the Philippines, PNB Capital & Investment Corp., and BDO Capital & Investment Corp. complete the list of issue managers for the Fixed Rate Multicurrency RTBs.
Initially, the issue size is $500 million. Depending on the demand of investors, the government has the option to increase the size to $1 billion as approved by the Bangko Sentral ng Pilipinas (BSP). Roberto Tan of National Treasure is optimistic that the demand for the RTBs would be strong. “I expect it to be successful because Filipino communities abroad and embassies said there is strong demand,” he said.
The bonds would come in three and five year multicurrency which would comprise $400 million in dollar-denominated bonds and 75 million in euro-denominated bonds. Of the $500 million issue size, 20 percent would be intended for retail investors and the rest would be for institutional investors. To be considered retail, the amount is anywhere from $100 to $100,000.
Tan will conduct a series of “financial literacy seminars” to discuss the benefits of investing the so-called OFW bonds. He will be leaving with a team of government officials and some representatives from the issue managers for various overseas Filipino centers in different countries to conduct the seminars. Their itinerary includes the Middle East, United States and Hong Kong, among others.
As an incentive for OFWs who would invest in the bonds, the government will be exempting them from the 20 percent tax levied on such investment. This is in line with the government’s efforts to provide overseas Filipinos an investment facility for their earnings.
