With ten short days to go before Landbank of the Philippines ends the offering period for its long-term negotiable certificates of deposit, confused overseas Filipino workers are still at a loss on how to access the offering.
At the heart of the problem are Landbank’s feeble presence overseas and a ticklish issue on documentary requirements. You will find many examples of those concerns from MoneySmart readers in my previous posts on the LTNCDs here and here.
Joey Sale, a senior analyst at Landbank, said the bank has held meetings on these issues Monday afternoon, conscious of the difficulties the OFWs are facing.
He said Landbank’s overseas offices could process applications from OFWs who want to buy the LTNCDs themselves and not through relatives. There are offices in California, Italy, Singapore, Japan, Taiwan and three in the United Arab Emirates. (A full list with contact details can be found here.)
But with almost eight million OFWs scattered all over the globe, many would likely not be anywhere near those areas. HSBC would be their next option.
Since the LTNCDs are onshore instruments, it is still not clear whether HSBC can offer the instruments in branches outside the Philippines. However, Joey Sale said interested OFWs may ask HSBC branches if they can process the application. I guess it can’t hurt to ask.
Documentary requirements were also a major ticklish issue. There has been a clamor for Landbank to relax its requirement for a special power of attorney giving relatives of OFWs the authority to make the investment for them.
While Landbank is not likely to relax this requirement because of legal constraints, it is considering extending the deadline. However, OFWs may have to submit another legal document called “deed of undertaking” (don’t lawyers complicate our lives? Hehe, peace!) where the OFW promises to deliver the special power of attorney after a period of time.
This has not yet been finalized, though. (Just a heads up for all of you out there looking for a way to invest in the LTNCD.)
So far, there has been lukewarm response because of these access issues. As of Monday afternoon, availments have only reached P2.65 million. Landbank is waiting to see if the demand will snowball this week. There are also talks of a second offering, but nothing definite yet.
With inflation figures said to reach 8% this year, Joey said those who are looking at real effective interest rates and not just the nominal rate of return find the LTNCD returns low. “It’s true, that’s a concern. But you can’t get similar interest rate for a similar investment in other banks. Time deposits that give lower rates will require you to put in P50,000. The LTNCD’s minimum is just P13,698.91,” he said.
Joey Sale has agreed that I post the investment banking department’s phone numbers in MoneySmarts. I do hope calling these numbers will give you a better experience than the hotline or trunkline. Good luck!
Contact:
Joey Sale – 405-7228
James Saldana – 405-7732
More details on the LTNCD here.
(P.S. Done in the service of the OFW, NOT for Landbank.)
May 8th, 2008 at 12:09 am
I’m interested to invest, but don’t know how to place the investment because I am located here in Equatorial Guinea, West Africa.
May 7th, 2008 at 6:19 pm
I’m really interested with this offering. is there any chance that the deadline could be extended?
May 7th, 2008 at 12:35 pm
My wife and I went to HSBC yesterday to inquire how we could participate and was told that the minimum investment they (HSBC) will accept is 2 million pesos. If the purpose of the government is to reach out and encourage OFWs to save and invest a portion of their income then requiring this much minimum defeats the purpose since a lot of OFWs do not have that much amount to invest.
May 7th, 2008 at 9:20 am
I am seaman & my mother & i invested in Landbank LTNCD. We were the first depositor for the LTNCD here Landbank-Main Iloilo. There were first confusion from their staff on the procedures on opening the account since we are the first, but after several minutes of checking the guidelines, their people at the New Accounts Dept who attended us were very accommodating and were smart to immediately absorbed their bank LTNCD guidelines even though they are really busy with their other clients attending to the needs of govt employee accts, retirees, captured ATM cards (I was wondering why there are plenty Landbank ATM card holders whose card were captured by their machine) & others.
We paid out P164,486.97 each for P240,000 LTNCD Placement for 5.5 years. We were allowed only to pay the placement for P240,000 & not for P250,000 which they are publishing on the newspaper. I hope the Landbank officials could able to clarify this since we were being told at the Landbank Iloilo that the deposit is on integral multiples of P20,000 (P250,000 is not multiple of P20,000) but they are publishing on their websites and at news that maximum investment placement is P250,000.
Anyone who applied for the LTNCD might find writing & filling-up several copies of forms a pain in the neck. Anyway, the banks are only complying with laws and we have to comply with them also.
I was just disappointed that they only allowed P240,000 max investment for OFW. They should have given higher max investment amount for OFW.
So, I am calling all seaman out there! This is the time for you to take out your money from the private bank and invest in Landbank LTCND that offers a higher return than an ordinary time deposit & savings acct that has no interests at all. (This is my first time to do business in government bank. My remittance acct are in Metrobank & BPI.)
May 7th, 2008 at 7:35 am
ria, your comment would make a great opening for an email to landbank first thing in the morning hehe. i suspect landbank’s weak global presence has something to do with its being a government bank, but i will have to check on that. i wonder if they have anticipated these kinds of issues from the beginning. i guess they assumed that OFWs would be willing to invest through their relatives here in the Philippines.