PH financial markets reopen

The Philippines resumed bond and foreign exchange trading on Wednesday and is poised to reopen the stock exchange on Thursday as the government agreed to exempt financial markets from the monthlong Luzon-wide lockdown.

But to comply with the prohibition against mass gather­ings as a way to combat the new coronavirus disease (COVID-19) pandemic, these institutions will have to follow stringent “social distancing” requirements. The Philippine Stock Exchange (PSE), for its part, will reopen without operating its physi­cal trading floor in Bonifacio Glo­bal City.

The PSE was locked down on Tuesday along with fixed-income trading platform Philippine Dealing and Exchange Corp., and the spot foreign exchange market following the government’s order to place the entire Luzon island under “enhanced community quarantine.” Only private establishments providing utilities and basic necessities as well as those related to food and medicine production, business process outsourcing and export-oriented industries were allowed to open.Financial market utilities will henceforth be exempted from the lockdown.

The Securities and Exchange Commission approved the off-site trading protocols for the PSE, which would perform start-of-day activities remotely using a virtual private network. It will continue to operate using the systems and servers in its primary site.

“It’s one of the best news for the week. The financial market is an important component of our economy. It’s still one of the best sources for capital of listed companies and funds for the investing public,” said Astro del Castillo, managing director at local fund management firm First Grade Finance Inc.

“However, expect PSEi (PSE index) to remain volatile. Investors will remain wary in investing aggressively,” he added.

So far this March alone, the PSEi already lost 1,452.54 points, or 21.4 percent. Last week was the worst seen since the global financial crisis of 2008, with P1.6 trillion worth of wealth wiped out from the local stock market, an amount equivalent to 8.5 percent of the country’s gross domestic product. Bangko Sentral ng Pilipinas Governor Benjamin Diokno tweeted on Tuesday night that the Inter-Agency Task Force for the Management of Emerging Infectious Diseases had granted the local stock and bond trading platforms exemption from

the enhanced quarantine measures “after they assured the authorities that necessary safeguards to ensure the safety of their employees and the community they interact with are in place.”

The PSE, for its part, will not operate its trading floor for the meantime, in line with the government’s prohibition against mass gatherings. About 150 floor traders typically stay at the PSE’s trading floor.

“Trading activities by all trading participants will have to be conducted remotely through off-site locations,” the PSE said.

The local bourse will follow the earlier-announced shortened trading schedule. The stock market will open at 9:30 a.m. and close at 1.p.m. during the Luzon-wide quarantine.