Gov't, private sector deepen capital markets

Published December 24, 2021, 2:35 PM

by Chino S. Leyco

The government and the private sector continued to take advantage of digital technologies to make it easier and more convenient for small investors and businesses to participate in the capital markets.

During a recent Capital Market Development Council (CMDC) meeting, the Bureau of the Treasury, Securities and Exchange Commission (SEC), and the Philippine Dealing System Holdings Corp. (PDS Group) presented updates on their respective streamlining and digitalization initiatives.

Finance Secretary Carlos G. Dominguez III, who is co-chairman of the CMDC, said the council has been moving very quickly in prodding both the government and private sectors in making it easier for Filipinos to invest, particularly in the bond market.

“We are also making sure that their investments are well-protected through robust cybersecurity systems,” Dominguez added.

The CMDC, which is also co-chaired by Benedicta Du-Baladad of the Financial Executives Institute of the Philippines (FINEX), and SEC Chairperson Emilio Aquino, is a joint public-private sector coordinating body tasked to promote and develop the Philippine capital market.

In its report to the CMDC, Deputy Treasurer Erwin Sta. Ana said the Treasury earlier released a mobile app that allows the public to access information about the different types of government securities and understand its funding and debt management functions.

The Treasury mobile app also contains a comprehensive discussion on the risks of investing in the different types of government securities, as well as the links to the front-end ordering platforms for retail treasury bonds, Sta. Ana said.

“In the next versions of the app, we will also include information on the end-of-day prices of retail government securities. So holders of the bonds can easily track the values of their holdings depending on the prevailing market levels,” Sta. Ana added.

The PDS Group, represented by Philippine Dealing & Exchange Corp. (PDEx) President and CEO Antonino Nakpil and Philippine Depository and Trust Corp. (PDTC) President & CEO Ma. Theresa Ravalo, reported on the progress of the Electronic Securities Issue Portal (e-SIP).

The e-SIP allows the online submission of documents required for PDEx listing and PDTC Registry services and facilities for Issuers and their Underwriter-Selling Agents in their Initial Public Offerings of corporate bonds.

Ravalo said that after Ayala Land Inc. (ALI) became e-SIP’s pilot user with its offer of a four-year P10 billion bond last April 21, four other Issuers onboarded their securities and client investors through the Portal.

“On the streamlining of e-SIP for the secondary market, there is an ongoing development and testing, and cybersecurity hardening to ensure that the necessary cybersecurity mitigants are in place before we push through with the secondary market phase,” she said during the meeting.

Ravalo said the PDS Group is also working with the Bankers’ Association of the Philippines (BAP) and the National Association of Securities Broker Salesman, Inc. (NASBI) on maximizing the use of e-SIP in streamlining process for customer suitability.

The goal is to roll out a standardized and digitalized customer suitability assessment form to eliminate the tedious process for investors of filling up the same forms several times when buying corporate bonds from different brokers.

Responding to Dominguez’s concerns about possible cyberattacks and scams, Nakpil assured the CMDC that PDS has an ongoing vulnerability assessment and penetration testing program to immediately address possible threats to its systems.

“It’s a continuing process that we are doing. And we ensure that we have the proper tools in place to provide security,” Nakpil said.

The SEC reported during the meeting that it continues to scale up its investor education program to encourage broad investor participation in the capital market and to protect the public from investment scams.

Noting the growing number of Filipinos looking to invest and the significant increase of retail investors in the capital market, the SEC underscored the need to “scam-proof” the public and guide them to legitimate investment options.