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Binay urges Filipinos to invest in BahayBonds

By Jose Rodel Clapano (The Philippine Star) Updated July 28, 2012 12:00 AM

Manila, Philippines - Vice President Jejomar Binay urged yesterday the Filipino people to invest in BahayBonds for as low as P5,000.

Binay, chairman of the Housing and Urban Development Coordinating Council (HUDCC), said the BahayBonds Series 2 (BB2) is a “safe and profitable investment alternative.”

“This is a great way to induce Filipinos to start saving, especially in light of the recent Bangko Sentral survey that most heads of Filipino households do not save,” Binay said.

The invitation to retail investors followed the announced issuance of P600 million worth of BB2 classified as residential mortgage backed securities mid-August of this year by the state-run National Home Mortgage Finance Corp. (NHMFC).

Binay, who also serve as Chairman of the NHMFC Board of Directors, said the BahayBonds2 would be the first-ever retail housing asset-backed securities in the Philippine market. 

He said it would be backed up by an asset pool composed of high quality accounts from the corporation’s prime assets.

The BB2 targets retail investors and are designed to be a safe, high yielding and affordable savings instrument.

“With a 4.80-percent interest rate, the bonds are higher than most interest rates on bank deposits. Coupled with a tax-free guaranteed return, this first retail mortgage bond would be the most attractive investment for individual investors who want to maximize their profits,” Binay said. 

“This is a good venture for overseas Filipinos, government employees, or every common Juan who do not save because they are not enticed by the interest rates offered by traditional institutions like banks,” Binay added.

The BB2 offers the privilege of free ATM-accessible savings accounts and the convenience of balance inquiry through internet and phone banking facilities both with Land Bank of the Philippines (LBP). 

Binay said its current market value is readily available due to Philippine Dealing Exchange listing and instant loan facility against latest market value.  

“As a bonus, house and lot units will be raffled for active accounts,” Binay said.

The Bangko Sentral ng Pilipinas considered BB2 as risk free because the securitized loans guaranteed by the Home Guaranty Corporation carry the sovereign guaranty of the Republic of the Philippines.

The transaction is classified into three tranches.  Majority of the issues classified as Class A senior notes would be sold to retail investors, Class B Senior Notes would be sold to qualified institutional investors while Class C Subordinated Notes would be kept by NHMFC.  

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