053107: ING, PNB creating mutual fund for OFWs

May 31, 2007
Updated 03:49:32 (Mla time)
Doris Dumlao
Inquirer

Dutch banking giant ING and Philippine National Bank (PNB) have teamed up to create within this year a mutual fund for overseas Filipino workers (OFWs) with a size of up to $500 million.

The two banks recently signed a memorandum of agreement to contribute $15 million each in seed money to the mutual fund, to be called the ING International Filipino Mutual Fund, top bank officials said.

In an interview Wednesday, ING Bank Philippine country manager Manuel Salak said the mutual fund would be set up and registered in Ireland and would be marketed across Europe and Asia.

“Our target fund size is $200-$500 million,” Salak said.

A mutual fund is an investment entity that pools funds of unit holders for investment in various securities. The units or shares are redeemable by the fund on demand by the investor.

The value of the underlying assets of the fund -- such as equities and debt papers denominated in peso, dollars or any other currency -- influences the unit prices.

PNB president Omar Byron Mier said at the bank's annual meeting of stockholders on Tuesday that PNB had agreed to tap its overseas network to distribute the mutual fund.

Mier said the mutual fund would be “the first investment product of its kind that would allow overseas Filipinos to invest in.”

PNB treasurer Ramon Lim said the minimum participation in the planned mutual fund would be $100 million, and would likely be launched first in Hong Kong and then rolled over to other markets, subject to compliance with regulatory requirements.

He said the mutual fund would likely find a robust market in the Middle East, which has a large population of OFWs.

He said the $30 million seed money to be contributed by PNB and ING would be covered by a five-year lock-up period.

OFW remittances coursed through PNB, which has the largest overseas network among local banks, reached $2.4 billion in 2006, accounting for 19 percent of the total market.

To expand its OFW remittances business, PNB has established two wholly owned subsidiaries -- one in Austria and another in Spain -- and opened two more banking units in Hong Kong.

Last April, PNB opened two additional subsidiary branches in Paris and Barcelona, bringing the total number of its overseas offices to 106.

http://services.inquirer.net/express/07/05/31/html_output/xmlhtml/20070531-68746-xml.html