By Charissa Luci-Atienza
The vice chairman of the House Committee on Banks and Financial Intermediaries expressed reservation yesterday over the government’s plan to establish its own fixed-income course.
Leyte Rep. Henry Ong said it would be better to have one bond market in the country with a window for the small- and medium-sized enterprises (SMEs) even as he cited the failure of the state-run Land Bank of the Philippines to acquire a majority stake in the Philippine Dealing System Holdings Corp. (PDSHC).
“It is good for the country’s bond market that the Land Bank was unsuccessful in its attempt to get majority control of the holding firm that runs the Philippine Dealing System,” the House leader said in a statement.
“If the intention of the government is to help small- and medium-sized enterprises (SMEs), then that would be achieved with a window or board for SME bonds, not with two separate systems,” he pointed out.
Finance Secretary Carlos G. Dominguez III expressed readiness to set up its own bond trading system, saying they will not force the shareholders of PDSHC to accept Land Bank’s offer.
The PDSHC is the holding firm of the country’s fixed-income trading platform.
“The Philippine bond market is not yet big enough for two trading systems,” Ong explained.
“Aside from that, the market and its players would be averse to too much government influence in the market. Conflict of interest would also be an issue.These are the two underlying reasons for the failure of Land Bank to take over the Philippine Dealing System,” he said.
Dominguez said there was no hidden agenda in the government’s bid to have grip on PDSHC, citing that sole intention is to allow micro-, small-, and medium-sized enterprises (MSMEs) to tap the local bond market for their financing needs.