By Pia Lee-Brago (The Philippine Star) Updated April 30, 2010 12:00 AM
MANILA, Philippines - Vice President and Housing and Urban Development Coordinating Council (HUDCC) chairman Noli De Castro encouraged overseas Filipino workers (OFWs) to enroll in the Pag-IBIG II program of the Home Development Mutual Fund (Pag-IBIG Fund) that will give higher dividends.
“This is a voluntary contribution program open to Pag-IBIG members. The dividends under this program are even higher than what we give under your regular Pag-IBIG contributions,” De Castro said.
With an average dividend rate of 5.5 percent per annum, higher than what the banks can offer, members can generate savings of close to P80,000 in 10 years, or about P34,000 in five years for a minimum contribution of P500 monthly. The savings are tax free and guaranteed by the government.
De Castro explained that the funds from members’ contributions go into the members’ housing and multi-purpose loans.
During a meeting with OFWs in Hong Kong and Singapore last week for the financial literacy briefing organized by the Bureau of Treasury, De Castro also urged OFWs to consider the various retail Treasury bonds offered by the Philippine government.
“These small denominated peso or dollar/euro bonds offer competitive interest rates and are much better than what you can get from ordinary deposit accounts,” he said.
The briefing was aimed to present the various types of financial instruments that can serve as safe havens for the hard earned income of OFWs.
With a minimum denomination of $100 and 100 euro, the bonds have a maturity of three and five years from issue date and cater to OFWs, migrant Filipinos, including their parents, children and allottees and residents with foreign-currency deposit units (FCDUs).
The bonds are considered tax-free since the tax for the bonds will be assumed by the government for OFWs and their beneficiaries.
The Vice President warned OFWs to be wary of people or companies offering investment schemes that offer “quick return and double your money back.” He said there are still a lot of unscrupulous elements out there offering “get rich quick” schemes which result in depositors left holding the proverbial “empty bag.”
He assured OFWs that the funds which will be generated from the government bond sale will help finance the country’s infrastructure projects and reduce the budget deficit.
The Bureau of Treasury reported that the government initially generated $346 million from the sale of the three- and five-year fixed rate RTBs with coupon rates of 2.875 percent and 4.125 percent respectively. The Bureau also sold 35 million euros of three-year bonds and 4 million euros of five-year bonds at 4.125 percent.
BPI Capital Corp., First Metro Investment Corp., Land Bank of the Philippines and PNB Capital and Investment Corp. are the joint issue managers for the bonds.
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