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Sept 3, 2010
Philip S. Chua , MD, FACS, FPCS Chairman Filipino United Network – USA
After attending the inauguration of President Benigno Simeon “Noynoy” Cojuangco III on June 30, 2010, the US Pinoys for Noynoy, which has been renamed US Pinoys for Good Governance, and together with non-US based leaders of the Overseas Filipino Nation, has embarked into an ambitious patriotic project to help the Philippines pay for its debilitating foreign debts and for its development projects.
The idea is to harness and transform the global Filipinos, starting with the almost 4 million in the United States, to a credit source, thru issuance of Bayan Ko Bonds, to be sold primarily to Filipinos in the United States, but would also be eventually available to the 10 million overseas Filipinos around the world. At present, almost 35 percent of the Philippine budget is allotted to automatic servicing of its debt of about USD$53 Billion, as mandated by law. The Arroyo administration left the country with empty coffers. This forces us to be niggardly in our spending for much needed education and health services, which amplifies the hardships of the most deprived sectors in our society. Something needs to be done with this massive debt service hemorrhage at the earliest opportunity concurrent with the administration’s vigorous effort to halt the internal leakages from graft and corruption.
Together with their allies from all over the world, US Filipinos are trying to step into the plate to provide the Philippines with an alternate source of credit that would be less costly in real terms compared to conventional external sources. While doing that, rolling over the externally held debt into peso bonds will provide these Filipinos the opportunity to earn a good return on their savings. An attractive incentive in this Bond offering is the opportunity to double your investment in ten years at an approximate compounded annual rate of 7 plus percent. In this arrangement a PhP 5000 investment in 2010 gets to be redeemed at PhP 10,000 in 2020. These investors also have the option to take on shorter term tenors of 5 years with almost the same pro-rated earnings as the ten-year Bayan Ko Bonds. An indication of its potential is manifested by the popularity, overwhelming unmet demands for, and success of, the PHP Retail Treasury Bonds because of the credibility highs being enjoyed by Noynoy’s presidency.
The objective of this venture is to use the proceeds from these bonds to be split 50/50, half for servicing of the country’s external debt and half for the much-needed development projects in various sectors in the Philippines. The target size of the Bayan Ko Bonds initial issuance is USD$500 Million to USD$1 Billion.
Once the kinks are ironed out in the mobilization of funds from what is now recognized as a virtual Overseas Filipino Nation (OFN), then the process can be repeated as often as needed, bounded only by the willingness of the OFN residents to share their fortunes with their native land. The annual remittances from overseas Filipinos is almost USD$20 Billion. The estimated aggregate income of the 11 million Overseas Filipinos is around USD$500 billion, about 3 times the expected GDP of the Philippines for 2010.
The 20 billion dollar remittance which translates into a monthly inflow of about 1.7 billion dollars is just about 4 percent of the total income of the OFN. If OFN residents saved 20% of their income, that would translate into USD$90 Billion savings each year, an enormous untapped potential for investment fund inflows to the Philippines. Indeed, the Global Filipinos, a Sleeping Giant, can be a powerful force in rebuilding the Philippines. Since the purchase of the Bayan Ko Bonds will be in hard currency, the expected increase of investment inflows will tend to appreciate peso values and would favor the peso holders of the Bayan Ko Bonds, explains New Jersey City University Fil-Am Professor Gil Ramos, who holds a doctorate in monetary economics and proponent of this Bond.
More than 98% of the Filipinos abroad left the Philippines out of necessity. Many of them long to return out of love for their Motherland, to visit or to retire. Inspired by the election of President Noynoy and his policy of good governance, most Filipinos abroad want to help our country eradicate corruption and poverty, and for the Philippines to prosper once again, as a nation with dignity, honor, and pride.
Shoulder-to-shoulder with their fellow Filipinos at home, the Filipinos abroad, can expedite in earnest the transformation of the Philippines into a nation where no crook shall walk on the halls of Congress, no criminal shall go unpunished, no person shall go to bed hungry, no family shall be homeless, no child shall be left behind, and where social justice shall equally serve the poor and the weak, and not just the rich and the powerful.
The Bayan Ko Bonds is not only a benevolent financial investment but a faithful patriotic bet on the return of glory to our beloved land of birth. This alone would be a most inspiring and satisfying yield.#
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