MERRY-GO-ROUND
By FLORO L. MERCENE
Floro L. Mercene
Only a small portion of the Philippine population owns stocks, but still everybody is affected by what happens at the stock market because it is an important cog of the economy, actually its barometer.
The stock market is an exchange of investors who buy and sell shares of publicly traded companies. Since the country's biggest corporations and partnerships are involved, and local and foreign investors, whether big or small are into this activity, the buying and selling of shares exert a major influence on how well the economy performs.
A booming stock market is expected to help drive jobs growth in the succeeding months, primarily by providing the opportunity for publicly traded companies to raise additional capital for business expansion. If their business expands, more jobs will be created, making a dent on the unemployment rate.
At the start of this year, observers noted that the country's largest firms took advantage of the surging market to sell new shares either through rights offerings or private placements. Even if the country suffered its highest inflation rate in months, there's nothing like a healthy and growing stock market to restore eroding investor confidence in the economy.
This is the reason government regulators are strict in monitoring the activities at the bourse. For instance, in the early part of the year, Finance Secretary Carlos Dominguez complained that the Philippine Stock Exchange's protracted compliance with the 20 percent ownership limit is slowing down the development of capital markets.
Dominguez noted that the PSE's slow action is thwarting the goal of the Duterte administration for a more inclusive financial system. The PSE, headed by President Ramon Monzon, meanwhile appealed to exclude the shares of dormant brokers whose trading rights have already been revoked, in the reckoning of ownership limit.
It is important that the PSE, along with other finance and business institutions, both government and private, agree to promote a symbiotic relationship for the sake of the nation's economic growth.