INVESTMENT

T R E A S U R Y

Treasury Bills

T-Bills are short-term promissory notes issued by the National Government. These are direct, unconditional, and fully-guaranteed obligations of the Republic of the Philippines. T-Bills are the most actively-traded zero-coupon debt instruments.

	Minimum Deposit		PhP 10,000.00
	Term/Tenor		91, 182, 364 (subject to availability
	Tax Feature		Interest income subject to 20% final withholding tax
	Interest Computation		True Discount Formula
	Manner of Purchase		Through the Secondary Market
	Documentation		Confirmation of Sale (COS) without recourse 3rd Party Custodianship documents
	Liquidity		Bank will provide liquidity for clients willing to sell securities subject to prevailing market rates for the remaining term / tenor of the T-Bills.
	Marketing Network		(cut-off is at 4:00 PM)

Best for
Individual and corporate clients who are looking for short-term and risk-free investment alternatives

Fixed Rate Treasury Notes

FXTNs are long-term financial obligations issued by the National Government which promise to pay a specific sum of money with frequent fixed-rate coupon payments at a specified future date. FXTNs have a known maturity and yield.

	Minimum Deposit		PhP 10,000.00
	Term/Tenor		2, 5, 7, 10, 20 & 25 years (subject to availability)
	Tax Feature		Interest income subject to 20% final withholding tax
	Coupon		Semi-Annual
	Interest Computation		Simple Interest / Add-on
	Manner of Purchase		Through the Secondary Market
	Documentation		Confirmation of Sale (COS) without recourse 3rd Party Custodianship documents
	Liquidity		Bank will provide liquidity for clients willing to sell securities subject to prevailing market rates for the remaining tenor of the securities.
	Marketing Network		Available at all Bank of Commerce branches nationwide (cut-off is at 4:00 PM)

Advantage
FXTNs are guaranteed by the Philippine Government and are, therefore, virtually risk-free.

Best for
Individual and corporate clients who are looking for long-term and risk-free investment alternatives.

 

Retail Treasury Bonds

RTBs are medium-term financial obligations issued by the National Government which promise to pay a specific sum of money with frequent fixed-rate coupon payments at a specified future date. RTBs are small denominated securities suitable for small investors offered through book-building or initial public offering.

	Minimum Deposit		Php 5,000.00
	Term/Tenor		3, 5 and 7 years (subject to availability)
	Tax Feature		Interest income subject to 20% final withholding tax
	Coupon		Quarterly
	Interest Computation		Simple Interest / Add-on
	Manner of Purchase		Through the Secondary Market
	Documentation		Confirmation of Sale (COS) without recourse 3rd Party Custodianship documents
	Liquidity		Bank will provide liquidity for clients willing to sell securities subject to prevailing market rates for the remaining tenor of the securities.
	Marketing Network		Available at all Bank of Commerce branches nationwide (cut-off is at 4:00 PM)

Advantage
RTBs are guaranteed by the Philippine Government and are, therefore, virtually risk-free.

Best for
Individual and corporate clients who are looking for medium-term and risk-free investment alternatives.

ROP Bonds

ROPs are alternative investment vehicles which give investors access to US-dollar denominated bonds issued by the National government with frequent fixed-rate coupon payments at a specified future date.

	Minimum Deposit		USD 10,000.00
	Term/Tenor		Various, from 3 to 25 years from original issue date.
	Tax Feature		Interest income not subject to 7.50% tax
	Coupon		Semi-Annual
	Interest Computation		Simple Interest / Add-on
	Manner of Purchase		Through the Secondary Market.
	Documentation		Confirmation of Sale (COS) without recourse 3rd Party Custodianship documents
	Liquidity		Bank will provide liquidity for clients willing to sell securities subject to prevailing market rates for the remaining tenor of the securities.

Advantages

• Better Yields. Depending on the type of bond purchased, yields can range from 2.0% to 6.5% until maturity. Interest is paid quarterly, or semi-annually, depending on the features of the specific bond purchased.
• Investment in Major Global Currency. Investment in a major and internationally accepted currency serves as client's protection against depreciation of the peso and other currencies against US Dollar.
• Tax Free Earnings. Earnings are exempt from all Philippine taxes.
• Opportunities for Trading Gains. Investors may opt to discontinue participation at any time and depending on prevailing market conditions, can take advantage of possible trading gains.
• Bank of Commerce's Professional Expertise. The Bank of Commerce I AM Group will be available for consultation on possible investment alternatives and will advise clients on investment strategies as needed.

Best for
Individual

Corporate Notes

Corporate Notes are medium to long-term financial obligations issued by a Private Corporation which promise to pay a specific sum of money with frequent fixed-rate coupon payments at a specified future date.

	Minimum Deposit		To be determined by the Issuer
	Term/Tenor		To be determined by the Issuer
	Tax Feature		Interest income subject to 20% final withholding tax May be tax-exempt for certain tenors
	Interest Computation		Simple Interest / Add-on
	Manner of Purchase		Primary Auction / Secondary Market
	Documentation		Confirmation of Sale (COS) without recourse 3rd Party Custodianship documents
	Liquidity		Bank will provide liquidity for clients willing to sell securities subject to prevailing market rates for the remaining tenor of the securities.
	Marketing Network		Available at all Bank of Commerce branches nationwide (cut-off is at 4:00 PM)

Advantage
Corporate Notes are issued by Private Coporations, thus provide higher yields.

Best for
Individual and corporate clients who are looking for medium to long-term and high yielding investments.

Spot Fx Conversion

Bank of Commerce will buy or sell one currency in terms of another currency for delivery within 2 banking days from deal date. The three two's:

• Two currencies
• Two rates
• Two parties

DIRECT

• Currencies expressed in US dollars per 1 unit of currency such as British pounds and Euro dollars. Also known as Volume Quotation
• Example : 1 GBP = USD 1.6670

INDIRECT

• Currencies expressed in currency per 1 unit of US Dollars such as Philippine Peso and Japanese yen. Also known as Price Quotation
• Example : 1 USD = PHP 47.10

COMMODITY CURRENCY
This is the currency being priced, usually 1 unit or fixed amount of the currency.

TERMS CURRENCY
This is the currency used to express the price of the commodity, in varying amounts of the currency.

USD / PHP 47.05
USD / JPY 90.30
EUR / USD 1.4920

TEXTUAL EXPRESSION

First currency :	COMMODITY CURRENCY
Second currency:	TERMS CURRENCY
	DOLLAR PESO
Verbal Jargon:	DOLLAR YEN
	EURO DOLLAR

TWO-WAY PRICE

	Bid / Offer
USD/PHP	41.70 - 41.75
USD/JPY	90.00 - 90.30
EUR/USD	1.4850 - 1.4920

LEFT FIGURE - BID: buying rate of the commodity currency from the point of view of the price maker. Selling rate from the point of view of the asking party.

RIGHT FIGURE - OFFER: Selling rate of the commodity currency from the point of view of the price maker. Buying rate from the point of view of the asking party.

TWO PARTIES: Quote USD = JPY 90.00 - 90.30

Quoting Party - Bank	Calling Party - Customer
Buys USD	Sells USD
@ JPY 90.00	@ JPY 90.00
per USD	per USD
Sells USD	Buys USD
@ JPY 90.30	@ JPY 90.30
per USD	per USD

Forward Fx Conversion

Bank of Commerce will buy or sell one currency in terms of another currency for delivery on an agreed date in the future specifically beyond the spot date.

FORWARD EXCHANGE RATE = SPOT RATE + SWAP POINTS

SPOT RATE: Agreement to buy or sell one currency vs. another for delivery within 2 banking days. Transactions can also be for value tomorrow or value today

SWAP POINTS: Interest rate differential of the currencies involved expressed in terms of points in exchange rate.

Example of Swap Point Computation

Compute for the 30-day Forward Rate of USD/PHP given the following:
Spot Rate=47.00
PHP Interest Rate = 4.00%
USD Interest Rate = 1.00% 47.00 x [(4.0%-1.0%)x30/360] = 0.1175

When Swap Points Are Positive:

• Positive Swap Points are said to be in a PREMIUM.
• The Forward Exchange Rate is higher than the spot rate

	Standard Amount		USD 1.0 mio
	Term/Tenor		1 day to 1 year
	Tax Feature		- Same as the PDS - From 9:00 a.m. -12:00 noon and from 2:30 p.m. to 4:00 pm (GMT + 8:00 MNL)
	interest Computation		Quoted two-way up to three decimal points.
	Manner of Purchase		- Forward Contract Line - Foreign Exchange Settlement Line - *Supporting Documents (underlying obligation)
	Documentation		Forward Contracts

BEST FOR

• Importers. Those who will buy USD in the future and are anticipating that USDPHP rate will go up
• Exporters. Those who are expecting USD inflows in the future and are expecting that USDPHP rate will go down