pdic_UsapangPera_GuideBook
pdic_UsapangPera_GuideBook pdic_UsapangPera_GuideBook
Ed says, “In their simplest form, bonds are actually borrowings by companies and governments. In contrast to short-term commercial papers, bonds have maturities of over one year when they are originally issued. Bonds are securities registered with the Securities and Exchange Commission and sold to the public. Bonds would normally pay interest first and periodically over the life of the bond and repay the principal upon maturity.” Ed apologizes to Aling Lorna for the following technical discussion, “However, there are also zero-coupon bonds wherein there are no interest payments. Zero-coupon bonds are sold for an amount lower than their face or maturity value. The difference between the amount invested by the bond holder and the bond’s face value represents the interest to the bondholder. The thing with zero-coupon bonds is that the coupon or interest stated for them is the effective interest rate earned by the bondholder. The interest earnings on a regular bond would only equate to the stated coupon rate if such interest earnings were re-invested at the same stated coupon rate by the bondholder. Bondholders will effectively earn the interest rate quoted on regular bonds if each interest collection is also made to earn the same quoted interest rate up to the maturity of the bond. So if the bondholder merely spends his interest earnings or reinvests them at a rate lower than the quoted bond interest rate, he will earn a lower effective rate.” 92 Other Places to Put Your Money
Financial Expert’s Corner Since bonds are securities sold to the public, they need to be registered with the Securities and Exchange Commission. However, by law, the securities issued by banks and the government are exempt from registration with the Securities and Exchange Commission. Bonds can be bought and sold electronically through the Philippine Dealing and Exchange system or PDEx. As such, bondholders can more easily make capital gains or losses by trading bonds. The actual investment instrument should indicate whether it enjoys any tax exemption afforded by law. “Wow,” exclaims Aling Lorna, “that is a lot to digest in just one sitting. Sir Ed, I hope you don’t mind if I first discuss the matter with my husband before I invest with you.” Ed replies, “That’s no problem Aling Lorna. Take all the time you need. And please take home the handouts we discussed.” Taking all the materials and sample computations that she covered with her bank branch manager, Aling Lorna thanks Ed and heads back home. Other Places to Put Your Money 93
- Page 51 and 52: Aling Lorna smiles and continues,
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- Page 91 and 92: Member: PDIC 1. PDIC was created by
- Page 94 and 95: It is just two weeks before Mang Do
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- Page 98 and 99: cash or near cash account. Such acc
- Page 100 and 101: Financial Expert’s Corner For lon
- Page 104 and 105: Stocks Mang Domeng notices a bewild
- Page 106 and 107: “You see, Nanay, although they ar
- Page 108 and 109: Financial Expert’s Corner The adv
- Page 110 and 111: Other Places to Put Your Money 1. W
- Page 112 and 113: It is just one more week before Man
- Page 114 and 115: Loads have a validity of one year f
- Page 116 and 117: 3. Know Your Bank’s Service Fees
- Page 118 and 119: time deposit automatically renewed
- Page 120 and 121: 6. Be Informed About PDIC Deposit I
- Page 122 and 123: “Orly, I am an OFW,” Mang Domen
- Page 124 and 125: Mang Domeng excitedly replies, “S
- Page 126 and 127: The Power of Information 1. You, as
- Page 128 and 129: Accrued interest - earned but still
- Page 130 and 131: Ponzi Scam - an illegal financial s
- Page 132 and 133: Determining If Your Expenses Are Ju
- Page 134 and 135: Annex B Regulatory Issuance No. 201
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- Page 138 and 139: ANNEX A: Deposit-Related Activities
- Page 140 and 141: BSP Circular No. 640 (Activities Wh
- Page 142 and 143: Sample Claim Form (Page 1) Annex D
- Page 144 and 145: Sample Claim Status Sheet Annex E 1
- Page 146 and 147: Annex G Republic Act No. 9505 Augus
- Page 148 and 149: (g) “PERA Investment Product” r
- Page 150 and 151: Sec. 7. Separate Asset. -The PERA s
Financial Expert’s Corner<br />
Since bonds are securities sold to the public, they need to be<br />
registered with the Securities and Exchange Commission. However,<br />
by law, the securities issued by banks and the government are exempt<br />
from registration with the Securities and Exchange Commission.<br />
Bonds can be bought and sold electronically through the Philippine<br />
Dealing and Exchange system or PDEx. As such, bondholders can<br />
more easily make capital gains or losses by trading bonds.<br />
The actual investment instrument should indicate whether it<br />
enjoys any tax exemption afforded by law.<br />
“Wow,” exclaims Aling Lorna, “that is a lot to digest in just one<br />
sitting. Sir Ed, I hope you don’t mind if I first discuss the matter with<br />
my husband before I invest with you.”<br />
Ed replies, “That’s no problem Aling Lorna. Take all the time you<br />
need. And please take home the handouts we discussed.”<br />
Taking all the materials and sample computations that she<br />
covered with her bank branch manager, Aling Lorna thanks Ed and<br />
heads back home.<br />
Other Places to Put Your Money 93
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