PH aims to join Asean trading platform
In line with the integration of Asean economies by the end of the year, the government eyes a merged domestic capital market exchange integrated with a regional trading platform by next year to provide local firms with a bigger financing source.
“We find the approaching establishment of the Asean Economic Community (AEC) at the end of this year to be an opportunity for the Philippines to continue and exert more efforts in its reforms toward a better developed financial markets to sustain capital inflows,” National Treasurer Roberto B. Tan told the Philippine Capital Markets Forum held in Hong Kong on Tuesday.
In this regard, Tan said the Philippine government had been updating its Capital Market Development Plan (CMDP), which had a component aimed at preparing the domestic capital markets for regional integration.
Tan said an initiative under the CMDP, dubbed “enhancing exchange competitiveness,” entailed developing new products such as exchange-traded funds or ETFs and derivatives like futures and index-based options. It also pushed for the use of online trading, among other new services.
“[The] enhancing exchange competitiveness [initiative] also involves improving the infrastructure of our exchange itself, where we have sought to merge our stock and bond exchanges and have also implemented an electronic disclosure system,” Tan added.
According to Tan, the CMDP is expected to result into a “world-class” exchange next year that “would be ready to join the Asean Trading Link,” which at present includes Malaysia, Singapore and Thailand.
“Through the Asean Trading Link, we anticipate greater ease of trading of securities among participating Asean economies, providing Philippine companies with a potentially larger source of financing,” Tan said.
In the same forum, Finance Secretary Cesar V. Purisima noted the expanding local currency corporate bond market, which more than doubled to $17 billion or 6 percent of the gross domestic product (GDP) at the end of 2014 from only $7.6 billion or 4.4 percent of GDP in 2009.
“Corporations are also borrowing longer from the markets. From 2000 to 2010, total corporate bonds with maturity longer than 10 years were at 0.62 percent of the total. As of December 2014, the figure increased to 8.05 percent of the total,” the Finance chief said.
