JEDDAH, 3 September 2007 — The recent collapse of hedge funds with heavy exposure to subprime mortgages in the US is a good lesson in how an investment could simply run off course in a volatile market.
However, if the investment outlook remains murky as financial markets teeter on the brink of breakdown, investors could always run to a safer territory — and government debt securities offer a place of refuge.
For many institutional investors, their immense size and liquidity would always give them an opportunity to inject cash to shore up loss-making positions. But the situation is entirely different for individual investors — whether hiding behind nominee accounts or on their own , for them what is lost is lost.
Being on tenterhooks could be avoided. For one, Philippine National Bank (PNB) officials assure that the bank’s investor-friendly investment packages are “safe and risk-free as they are guaranteed by the Philippine Deposit Insurance Corporation” and still, some of them are protected by no less than the Philippine central bank (Bangko Sentral ng Pilipinas).
In a recently held PNB roadshow in the Western region in which new deposit and investment schemes were unveiled, overseas Filipino workers (OFWs) received a discourse on different PNB financial products, notably on Treasury bills.
Modesto F. de Guzman, manager, PNB Telemoney Center in Alkhobar, said T-bill is “the highest yielding risk-free investment instrument” as it is “fully and unconditionally guaranteed by the government through the BSP.”
Treasury bill is one of the Treasury securities issued by the central bank to finance its debt obligation and is backed by its full faith and credit. That is why investing in T-bills is completely safe, he said. The other debt financing instruments are Treasury notes, Treasury bonds, and savings bonds. All of these Treasury securities (besides savings bonds) are very liquid.
Moreover T-bills are issued at a discount from their face value. To avail of T-bill certificate, one has to make a minimum deposit of 50,000 pesos that would gain a 4.85 percent interest in one year, he said.
PNB, de Guzman said, is the only authorized bank by the Bangko Sentral ng Pilipinas to sell Treasury bill in the Middle East, which guarantees it too.
He said for any one interested in buying the T-bills, he has to make a deposit of 50,000 pesos that would gain a 4.85 percent interest in one year.
PNB officials based in the Kingdom underscored the virtue of prudence in making enlightened and judicious investment in the light of rampant fraudulent investment schemes.
De Guzman warned OFWs to be vigilant and wary of white-collar fraudsters peddling their vile financial gimmicks — whether in person or through the Internet — with the sheer intention of siphoning off whatever hard-earned money or little savings a squeaky clean Juan de la Cruz has.
PNB’s financial products are aimed at drawing the enthusiasm of OFWs not only in the importance of saving but investing in financial ventures that would guarantee tangible returns whether in the short or long term.
The official warned again the OFWs not to fall prey to schemes which promise attractive returns, as chances are they are “illusory, therefore an utter hoax”.
“Dollar Mint” is another PNB financial product that draws a more lucrative return. Under the plan, a depositor is required to have an initial deposit of $5,000, maturing in one year with a 3.5 percent-accrued interest.
PNB, voted as “Outstanding Commercial Bank” in 2006, and reporting the highest OFW remittance in 2005, is doing everything it could to assist every OFW not only in terms of remittance, but much so in providing secure investment projects with right strategies.
Recent available date showed that OFW remittances from January to July this year grew 18.0 percent year-on-year to $7.03 billion.
PNB has other services at its disposal, like the “Dollar Door-to-Door Delivery”, “Peso Door-to-Door Delivery”, “SSS Remittance of Loan Amortization and Members Monthly Contribution”, aside from other instant products like the “instant PNB GFMC” which carries no maintaining balance, “”US Dollar Passbook,” and “Peso Time Deposit.”
Furthermore, the bank’s easy-term car loan program encourages OFWs to set up transport business in the Philippines, while not discounting the opportunity of having a new house under a separate housing loan scheme.
Robert H.R. Constantino, PNB Telemoney Center manager in the Western Region, pledged the bank’s continuous support, hinting at another round of investment forum with the OFW community in the Western Region.
In parting, bank officials reminded the forum participants to exercise caveat emptor doctrine in commercial law, that is, beware before investing.
PNB, a multi-awarded bank, and the fifth largest private local commercial bank in the Philippines in terms of assets, is majority owned by Lucio Tan, ranked 451st richest person in the world in 2006.