Philippines Financial Sector Assessment Program : Capital Markets Development
The Philippines corporate debt and equity markets will need to grow to provide alternative financing sources to support the strongly growing economy and emphasis on infrastructure spend. Capital markets deepening will be an essential pre-requisite...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/100761629265204361/Philippines-Financial-Sector-Assessment-Program-Capital-Markets-Development-Technical-Note http://hdl.handle.net/10986/36185 |
| Summary: | The Philippines corporate debt and
equity markets will need to grow to provide alternative
financing sources to support the strongly growing economy
and emphasis on infrastructure spend. Capital markets
deepening will be an essential pre-requisite for the
country’s continued economic development. Well-functioning
capital markets ensure the optimal allocation and pricing of
capital. This enables retail and wholesale pools of capital
to be efficiently deployed in a manner that maximizes
returns for such owners of capital against their risk
profile. Furthermore, there are a number of technical and
operational issues that can be addressed, that can
significantly improve the enabling environment for and
functioning of the capital markets. The result of these
factors has been a lack of focus in policy development and
implementation that has hampered capital market development.
Key issues include: a lack of commitment to reform from key
stakeholders that has impeded the development of markets and
market infrastructure; an onerous tax environment that has
deterred issuance and investment; a continuing need to
improve investor confidence by strengthening the quality of
supervision and enforcement for market intermediaries and
market operators; cumbersome regulatory requirements and
processes around issuance, particularly debt issuance; and
outdated and inefficient trading and post-trading
infrastructure, and governance concerns regarding market
operators. In order to effect meaningful change, a capital
markets champion is required. This champion should be
cognizant of the relevance of capital markets to the country
and possess the will and vision to drive legislative,
regulatory, and tax reforms. In addition, a commitment to
initiate a change in the ownership and governance of key
exchanges and enforce policy against entrenched interests
will provide considerable impetus for development. |
|---|