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THE
devil seems to have hounded the unending discussions on
the planned sale of the overseas Filipino
worker-targeted bonds.
At a
briefing the Land Bank of the Philippines hosted
Wednesday night to highlight its financial performance
the past nine months, it was learned that the planned
sale has not even pushed past the planning stage, having
been mired in minute discussions over this feature and
that.
LandBank
senior executive vice president Alfonso Cruz said a sale
as little as $100 million worth can be executed with
relative ease in the same way $1 billion worth may be
sold.
“We
could even do $200 million easily if the Bangko Sentral
ng Pilipinas would let us,” Cruz told reporters.
He and
his boss, LandBank president and chief executive officer
Gilda E. Pico, acknowledged that while the discussions
may be complex, the objective was simple: help teach
more than eight million OFWs financial literacy and the
value of saving a part of their foreign-currency
denominated earnings.
According to Cruz, quite a number of OFWs retain 40
percent, and some even up to 60 percent, of their
earnings abroad as savings.
One of
the objectives was to pull that pool of savings back to
the Philippines where it can do some economic wonder
instead of letting it lie idly overseas, he said.
Unfortunately for the planners, however, the devil was
in the details.
“There
remain questions on regulations,” Cruz said to
acknowledge the fact that a US-dollar denominated bond
cannot be sold abroad without running afoul of local
rules.
If sold
in the
Philippines,
marketing issues have to be addressed and the BSP has
thus far let out a reluctance to give its assent, given
the complications the bonds would do to the nearly
saturated domestic-liquidity situation.
The
continued influx of foreign funds has caused
money-supply levels to go up, necessitating costly
sterilization measures to the BSP totaling P38 billion
thus far.
Land
Bank vice president for corporate finance Alex Macapagal
said the sale might have to be conducted onshore to
avoid complications.
But even
then, there are issues related to the need to keep the
sale “strictly for OFWs only”, given that previous
retail bond sales were purchased mostly by
institutional, not retail, investors.
“It’s a
challenge,” Macapagal acknowledged.
He said
the OFW bond sale may not be denominated in the local
currency as there are enough instruments of the kind
already available in the market. |
