The reforms initiated by the government to deepen the local capital markets will ensure the economy to emerge stronger and more resilient in the aftermath of the prolonged pandemic, the Duterte administration’s chief economic manager said.
Finance Secretary Carlos Dominguez III said the proposed Capital Market Development Act as well as the simplification of passive income and financial services and transaction tax will build a “truly broad-based and inclusive financial system fit for the 21st century.”
While these reforms require Congressional nod, Dominguez said the Department of Finance (DOF) and the Capital Market Development Council (CMDC) have initiated several measures that made processes in the financial system more efficient and accessible to bond issuers and retail investors.
Dominguez cited, for instance, the recent launch of the electronic Securities Issues Portal (e-SIP) by the Philippine Dealing System (PDS), and the introduction of mobile software such as the Bonds.PH and Overseas Filipino Bank apps.
“All these efforts should open the door to a steady stream of new listings and new investment products,” Dominguez said at the opening of the virtual Initial Public Offering (IPO) Forum organized by the Philippine Stock Exchange (PSE).
“We are very optimistic to bounce back from the COVID-19 crisis stronger and more resilient than ever. The capital markets, I believe, will lead us in this recovery,” he added.
The online forum led by PSE president-CEO Ramon Monzon was held as part of the PSE’s information campaign on the amended listing rules of its Main, and Small, Medium and Emerging Boards.
This forum also discussed the advantages and expansion opportunities for small, medium enterprises (SMEs) in the stock market.
The proposed Capital Market Development Act now pending in the Congress seeks to develop a sustainable corporate pension system to help secure the future of Filipino workers and their families while making more capital available in the financial sector to stimulate growth.
Another priority measure that the DOF is lobbying the Congress to pass this year is the bill simplifying the taxation of passive income and financial intermediaries.
This proposal to reduce the number of combinations of tax bases and rates in the financial sector from 80 to about 40, represents Package 4 of the Duterte administration’s Comprehensive Tax Reform Program (CTRP).
“Package 4 aims to shift from the traditional bank-centric funding to capital market financing. It will help us provide long-term funding for our infrastructure program,” Dominguez said. “With their high multiplier effect, infrastructure investments will be the cornerstone of our economic recovery.”
In his pre-recorded message, Dominguez assured forum participants that as CMDC chairman, he is committed to do his utmost for “better investor protection, improved corporate governance, the centricity of shareholders, and broader investor participation.”