Your Landbank LTNCD questions answered

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.)

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