Capital Market in Asia

By Joann Santiago

The government is exhausting all means to be part of the region’s capital market to enable companies to be at level playing field vis-à-vis their counterparts overseas, said Finance Secretary Cesar Purisima on Tuesday.

He explained that there are huge funds sloshing in the global economy but local companies are being hindered by the size of the domestic economy along with some regulations in tapping these prospective investments.

“Our dream is to integrate local capital market with that of the region so that recycling (of funds) can be done here,” he said during the Euromoney economic briefing.

Purisima explained that integration with the region’s capital markets is not an easy task given the need to first harmonize disclosure rules and accounting standards, among others.

He supported the suggestion raised during the forum for local companies to source funds abroad to be known and get the necessary exposure and opportunity now being enjoyed by other entities overseas.

Another factor that prevents local companies from sourcing funds abroad is being capitally-handicapped, he said.

“That’s why it’s important that we create an ASEAN (Association of South East Asian Nation) class of securities that will include Philippine names. And I think that would be good for all of us,” he said.

The Finance chief said creation of a venue where all regional capital market players can join would give companies get lower borrowing cost.

He pointed out that cost of capital in the country “has gone down with improvement in the credit rating as well as the market perception on the Philippines.”

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