The Land Bank of the Philippines has an investment instrument for OFWs and their relatives that offers 7% yield and exemption from 20% tax if held until maturity of the 5 1/2 year term.

Evaluate the investment closely. And if you decide it’s a good investment for you, act fast because the public offering period ends on May 16, 2008.

Below are a few FAQs, some insights and more links to guide you in your investment decision.

From the Land Bank Website:

1. What is an LTNCD?

Under BSP Circular No. 304, Series of 2001, an LTNCD is a long-term negotiable certificate of time deposit indicating an amount of bank indebtedness with a designated maturity.

2. Why invest in the LANDBANK LTNCDs?

The LBP LTNCDs are high-yielding, negotiable deposit instruments covered by PDIC insurance. Issued in P20,000 denominations (maturity value) with a 51/2 year tenor, the LBP LTNCDs are designed to help OFWs participate in the government’s savings mobilization program. LBP LTNCDs acquired during the public offering and held up to maturity are withholding tax-exempt.

3. Who can purchase the LANDBANK LTNCDs?

Qualified investors are Overseas Filipino Workers and their relatives up to 3rd degree of consanguinity (children, grandchildren, parents, brothers and sisters, nephews and nieces, grandparents and uncles and aunts) may purchase LBP LTNCDs. Investors are required to present proof of overseas employment (OWWA Card, Employment Contract, PDOS Certificate, etc.). In addition, relatives are required to present proof of relationship with the OFW (marriage contract, birth certificate, notarized undertaking of relation to OFW, etc.).

4. What is the yield or discount rate for the LANDBANK LTNCDs?

The instrument, which carries a yield of 7.00%, will be issued at a discounted amount of P13,698.91. In effect, an OFW will only need P13,698.91 to purchase LTNCD. If he holds it up to maturity or 5 ½ years, his investment will grow to P20,000.

This certificate of deposit with yield of 7% is definitely better than idle money stored in a commercial bank time deposit that yields just about 2.5% per annum. The tax exemption is also a great benefit.

Land Bank has the backing of the Philippine Government. I consider this investment low-risk.

Do note, however, that the 7% yield doesn’t beat the current inflation rate of 8.5%. Of course, the inflation rate may stabilize to the usual ~4% within the 5 1/2 year term of the LTNCD.

Remember, evaluate the investment closely, look into the details. And if you decide it’s a good investment for you, act fast because the public offering period ends on May 16, 2008.


(02) 522-0000 loc. 2543, 2369, 2558

(02) 405-7228 / 405-7732 / 405-7733
Read Land Bank’s LTNCD FAQs >>

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