Philippine National Bank (PNB)’s LTNCD offering

Those looking for safe but higher-yielding instruments can turn to Long-Term Negotiable Certificates of Deposits (LTNCD). The Philippine National Bank is expected to issue a minimum of P3 billion worth of LTNCDs in the next few days.

What is LTNCD?

Long-term negotiable certificates of deposits (LTNCDs) are peso-denominated negotiable certificates of deposits that mature after at least five years.

Are LTNCDs the same as time deposits?

Almost the same but not entirely the same. Their differences lie mainly on the following:

  • (a) Investment period. LTNCDs have relatively longer term, usually at least 5 years and 1 day;
  • (b) Tax concern. LTNCDs are usually tax-free because of their longer tenor;
  • (c) Pre-termination. LTNCDs cannot be pre-terminated; and
  • (d) Negotiability. LTNCDs are negotiable, meaning they can be sold to other investors prior to maturity and can even be used as collateral for a bank loan.

What are the terms of PNB’s LTNCDs?

The indicative interest rate for PNB’s LTNCD is 6.25% to 6.50% per annum. The final rate will be announced in the next few days.

Interest will be paid quarterly. The first interest payment will be on June 30, 2009 then every quarter thereafter until maturity on March 31, 2014.

Minimum investment is P500,000 and succeeding investment must be in increments of P100,000.

Are LTNCDs covered by the PDIC?

Yes, because LTNCDs are considered deposit accounts. PNB says the entire P500,000 is covered by the Philippine Deposit Insurance Corporation (PDIC).

How do I invest in Metrobank’s LTNCDs?

Ask the Trust Group of your bank if they are offering PNB’s LTNCDs. You may also contact the selling agents of this instrument including Deutsche Bank Manila, Allied Banking Corporation, First Metro Investment Corporation, and Multinational Investment Bancorporation. Of course, you may inquire with any PNB branch. You may also call the Marketing Division of PNB at (02) 526-3534.

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9 thoughts on “Philippine National Bank (PNB)’s LTNCD offering”

  1. From above:

    “PNB says the entire P500,000 is covered by the Philippine Deposit Insurance Corporation (PDIC).”

    Is P500k PDIC coverage already in effect?

    Anyway, this offering of PNB is great.

    • That also was my concern. The PNB representative I talked to said the entire P500k is covered so I called PDIC to inquire. The PDIC person said the proposal to increase coverage has already been approved and its implementation is pending only upon the publication of the new Charter. I asked her about the PNB offer and she said yes it’s going to be covered.

  2. “You may also contact the selling agents of this instrument including Deutsche Bank Manila, Allied Banking Corporation, First Metro Investment Corporation, and Multinational Investment Bancorporation. ”

    Is their a difference in the interest rate if I get one from First Metro Investment Corporation as compared to direct from PNB?

  3. If you’re a retail investor buying only a small amount, I don’t think they will offer a different rate. But if you are an institutional buyer buying in bulk, probably you can negotiate with the selling agents to get a higher yield.

  4. Thanks james! I called PNB treasury, they said if P500k is invested, the interest rate is the same for both banks.

    Their is only a minimal charge of P20 pesos per quarterly interest out if i sourced it from Metrobank/First Metro.

  5. They said P500k is covered as the PDIC coverage of P500k is already “in the bag”. It’s just a matter of weeks daw.

    I hope the “weeks” won’t turn into months hehehe…

  6. Given the present situation as its unfolding, with the PDIC being unable to service the claims of the Depositors of the 12 legacy banks, I doubt if it makes any difference what figure the PDIC claim to insure, they appear to be broke and are quite blatantly changing there own rules to suit themselves and hide there lack of funds.


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