Peace of Mind for Legacy Bank Depositors in the Philippines

In a time of financial volatility and economic turmoil around the world, many investors in the Philippines are grateful that their time deposits in Legacy Banks continue to yield guaranteed fixed incomes every month regardless of the ups and downs of financial markets.

Legacy Bank clients get 16% to 20% interest per year, tax free, for time deposits of more than 5 years and interest can be collected every month – a big advantage for retired people and others with investible funds who need regular and predictable cash flows to cover their monthly expenses. These yields are higher than current inflation rates in the Philippines – thus ensuring real earnings for the invested funds.

Depositors also have peace of mind that their deposits -- whether in big or small banks, in commercial or rural banks – are all insured by the same state agency, the Philippine Deposit insurance Corporation (PDIC), up to the same amount mandated by Philippine law, i.e., Php 250,000 per depositor. ( PDIC also wants to insure all bank deposits in the Philippines regardless of the amount to further reassure depositors that their money is safe if deposited in any Philippine bank.)

This cannot be said of other types of investments. Mutual funds are subject to the ups and downs of stock and bond markets. According to the Investment Company Association of the Philippines (ICAP), a group composed of the top 12 asset management companies in the country, locally-managed mutual funds (numbering at least 40) have been pummeled by the global financial crisis.

Among the hardest-hit mutual funds as of October 2008 was Philam Fund Inc., a member company of troubled American International Group (AIG) which was bailed out recently by the United States government to the tune of more than $100 billion to avoid bankruptcy.

Philam Fund showed year-to-date losses amounting to 30.63% of asset values. Year-on-year, the same fund declined by 33.58%. Another financial product from the same company, Philam Strategic Growth Fund Inc, showed declines of 35.55% year-to-date and 39.04% year-on-year.

With the global financial crisis showing no sign of abating anytime soon, investors in the Philippines are much better off putting their hard-earned money in the care of PDIC-insured banks if they want to have peace of mind and safety of capital in these uncertain times.

News Release: Peace of Mind for Legacy Bank Depositors in the Philippines
Submitted on: December 04, 2008 03:28:50 AM
Submitted by: Blair Lewis
On behalf of: www.legacy.com.ph/home.html