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Biz Buzz: Bank treasurers, traders win at last

business / Columnists
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Biz Buzz: Bank treasurers, traders win at last

/ 05:22 AM July 07, 2017

After being in operation for more than a decade, the organization touted as being one of the most important reform movers in the local financial sector in the aftermath of the 1997 East Asian financial crisis is all but set to be broken up.

We are, of course, talking about Philippine Dealing System Holdings Corp. and its operating units, especially Philippine Dealing and Exchange Corp. or PDEx—the operator of the country’s bond exchange.

Biz Buzz learned that the owners of PDEx — the Bankers Association of the Philippines — have gotten tired of struggling day in and day out with the challenges of operating the controversial exchange, which was originally envisioned to make the trading of fixed-income securities (government and corporate bonds) more efficient and safer.

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No sooner was the system conceptualized than it was challenged by the treasurers of the banks it was supposed to serve. These treasurers, who were members of the Money Market Association of the Philippines (Mart), initially staged a revolt and refused to cooperate with PDEx, but regulators put their foot down and everyone had to toe the line.

Today, however — after playing along for almost 12 years — it would seem that the bank treasurers and traders may have won the long game after all. The PDS/PDEx scheme was backed by two former central bank governors, Rafael Buenaventura and Amando Tetangco Jr., but that was a long time ago, and change has come, it would seem.

As we had reported in Biz Buzz earlier, the BAP now wants the government securities trading business spun off from PDEx and handled by Mart, which will then apply for self-regulation organization (SRO) status, effectively making it a separate exchange for the trading of government bonds.

The peso-dollar price setting business of PDEx will also be spun off into a separate unit, leaving the parent firm, PDS Holdings, with only the trading platform for corporate bonds and the securities depository and custodianship businesses, both of which are of particular interest to the acquiring Philippine Stock Exchange (especially the latter unit).

There is one catch, however. Back in 2013, former Rep. Luis Villafuerte — an ally of bank treasurers and a longtime critic of the PDEx scheme — sued the bond bourse, alleging that its existence effectively created a monopoly for fixed-income securities trading in the country. And while that case may have been filed four years ago (and has, to some degree, forgotten), it still poses a legal roadblock to the plans of the BAP, which has, for its part, grown weary of supporting an unpopular undertaking.

So recently, the BAP — led by its president Nestor Tan of BDO Unibank — wrote Villafuerte a letter outlining the organization’s plan for what, in effect, amounts to the breakup of the PDS Holdings scheme.

If one were to read between the lines, the BAP basically told Villafuerte (and his co-petitioners former Sen. Aquilino Pimentel Jr., Budget Secretary Benjamin Diokno and former national treasurers Caridad Valdehuesa and Norma Lasala): “You win. But first you have to withdraw your case against PDEx (now lodged at the Supreme Court). Then your victory will be complete.”

Also another winner in this deal is financial news and data provider Bloomberg, which is being tapped by Mart as its technology provider for the bond trading platform and well as the pricing system that will determine the value of banks’ bond holdings at any given time.

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Bloomberg had initially allied itself with Mart when bank treasurers were resisting the PDEx scheme, so it found itself frozen out of the lucrative bond exchange business during the last decade and a half or so.

But now, Bloomberg will be back in business, displacing its rival Reuters, which was tapped by the old PDEx management as its technology provider of choice.

“Too bad for PDEx,” said one banker who was opposed to the scheme since its inception. “It was a noble reform move with good intentions. But the personalities behind it were too brusque. They tried to ram it down our throats.”

Hopefully, the next reform initiative will be met with wider acceptance. —DAXIM L. LUCAS

Trump branding

Trump Tower Manila, the upscale residential tower that Century Properties Group is building in Makati, is proudly keeping this brand regardless of what happens in US politics. While the Trump Organization is desisting from pursuing any new overseas deals while businessman-turned-President of the United States (Potus) Donald Trump is in office, CPG has shrugged off rumors that the branding rights for the Makati tower may be revoked by the American group.

“The Trump brand is quite different from President Trump. Trump is bigger than the position in terms of relationships,” said CPG founder Jose E.B. Antonio, who was appointed special envoy to the US last year. He was tasked to “enhance business ties and strengthen the economic affairs” of the two countries. Antonio had earlier served as special envoy with the rank of ambassador to China.

CPG signed the Trump Tower Manila licensing deal in 2012 when Trump was nowhere in the radar as the next Potus. Antonio, for his part, said he had known the American business magnate since 2010 and had chosen to build a high-rise development carrying his name because Trump Organization was a reputable builder of skyscrapers in the US and all over the world.

Going by the pronouncements of the Trump Organization, Antonio said that the group had already stated that they would confine new business activities to the mainland US while Trump is president. But there’s no risk of CPG losing the now much more valuable licensing deal with Trump Organization.

If and when Trump Organization resumes doing new offshore businesses.—for instance once Trump finishes his term, Antonio said it would be a business decision from both sides if they would expand their partnership in the Philippine property space. Doris —DUMLAO-ABADILLA

State-owned ‘endo’

We’ve heard reports about the so-called “endo” labor practice so many times these past few months it’s hard to get the word out of your head. Endo, of course, is the practice of terminating contractual workers before six months to avoid having to regularize them, and no less than the Duterte administration has vowed to put an end to this practice.

So it is quite ironic to find out that People’s Television Network (PTV-4), a state-owned media company, suddenly uses the term so lightly in explaining why it has to fire a reporter prematurely.

The news reporter, who has now become the story herself, is named Lala. To those who don’t know her, her name sounds like part of a hit pop song, that catchy riff that gets you hooked after a powerful chorus.

But to the countless workers who have become all too aware of this labor issue, her name .—Lala Babilonia—now sounds like another muffled voice in the face of an abusive employer.

This all happened one night on June 29, Babilonia said in an online blog entry. She was writing her script for the evening newscast when the news desk manager approached her to tell her that her job was done for good.

Her department head told her that she wouldn’t be part of the next lineup of reporters. While this was all part of management’s prerogative, she couldn’t get why she wasn’t given the 15-day prior notice, even though this was prescribed in her contract.

Surprisingly, she said she was not the only reporter forced to make the same exit. On the contrary, there has been a “series of terminations” at PTV-4.

“When I was still with the network, I reported on the government’s campaign against end of contract or what we call ‘endo’. Ironically, I became a victim. So did my my former colleagues,” she wrote in her blog entry.

The situation is full of ironies. At the forefront of which is the fact that PTV-4 is under the nose of the Duterte administration, a leadership that has vowed to end endo.

Much has been said about endo, and yet in the same breath, not much has been said about how it feels to build your life around a job that supports your daily living only to find out that that job would no longer be there for you the next day.

When Babilonia asked her department head why she was not given a 15-day prior notice, the latter said — although she clarified it was non-verbatim — “Kaya nga endo, di ba?” (“That’s why it’s called endo.”) —ROY STEPHEN C. CANIVEL

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TAGS: 1997 East Asian financial crisis, Biz Buzz, Century Properties Group, Endo, pdex, Philippine Dealing System Holdings Corp., trump tower manila
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