source: Iris C. Gonzales - philstar.com

MANILA, Philippines - About 15 to 20 percent of the government’s planned retail treasury bonds (RTBs) for overseas Filipino workers (OFWs) will be euro-denominated, National Treasurer Roberto Tan said yesterday.

He said this is to cater to overseas Filipinos who are earning in euro. The rest of the bonds would be dollar-denominated to cater to majority of dollar-earning Filipinos abroad.

Tan said the government would soon be conducting “financial literacy seminars” to various OFW centers in different countries to discuss the benefits of investing in this so-called OFW bonds.

The government is eyeing to issue roughly $500 million in RTBs in April and is now seeking approvals from the Bangko Sentral ng Pilipinas, the Office of the President and the Bureau of Internal Revenue (BIR).

“We’re negotiating with the BIR for better tax treatment (for buyers of the bonds),” Tan said.

The bonds may be in denominations as small as $100 and may be available in tenors of three and five years. These bonds are intended to serve as investment facilities for Filipinos abroad and not just as a source of funding.

To make room for the OFW bonds, the government will likely issue less Treasury bills and bonds this year.

“We will make the corresponding adjustments” Tan said, referring to the government’s local borrowing program.

The government has already completed its $2.5 billion programmed commercial borrowing requirements for 2010 following the successful sale of $1.1 billion worth of Samurai or yen-denominated bonds in the Japanese financial market last month.

Fiscal authorities earlier revised the commercial borrowing program to $2.5 billion from foreign commercial creditors from a previous program of $2 billion to plug a record deficit of P293 billion for this year. It maintained its 2010 plan to borrow $1.8 billion from multilateral lenders.