Finance Secretary Cesar Purisima. FILE PHOTO
“FINANCIAL regulators and market participants are preparing “contingency” measures to ensure that the local bond market won’t be disrupted by a legal challenge to the existing fixed-income trading platform operated by the Philippine Dealing & Exchange Corp. (PDEx).”
Finance Secretary Cesar Purisima said regulators would not want the case filed before the Supreme Court involving PDEx to hamper the operations of the secondary market for fixed-income securities. “We are working to avoid market disruptions and implement mechanisms that will preserve transparency, price discovery and market stability,” Purisima told the Philippine Daily Inquirer.
National Treasurer Rosalia de Leon said officials of the Bureau of the Treasury and other regulatory agencies named as respondents to the case would have to sit down to discuss the issue and how to address the legal challenge. “The concerned government agencies will discuss among ourselves how to deal with the matter,” De Leon said, adding her office has not received a copy of the complaint as of Wednesday.
Purisima and De Leon, along with Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., were among the public sector respondents to an “antimonopoly” case slapped against PDEx by former senator Aquilino Pimentel Jr., former congressman Luis Villafuerte, former Budget Secretary Benjamin Diokno and former national treasurers Norma Lasala and Caridad Valdehuesa. The Securities and Exchange Commission is also a respondent.
De Leon said the concerned government agencies would have to scrutinize the details of the case before deciding on an appropriate action plan.
The fixed-income trading market in the Philippine has a daily turnover of slightly under P30 billion, bulk of which involves government securities. This is more than three times the daily value turnover at the Philippine Stock Exchange, which is in negotiations to acquire a controlling stake in the capital market infrastructure under Philippine Dealing System Holdings (PDS), which includes PDEx, Philippine Depository and Trust Corp. and Philippine Securities Settlement Corp.—all of which were likewise named respondents to the case along with the Bankers Association of the Philippines.