Philippines: No End to Progress

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Philippines: No End to Progress

A series of bitter disputes between stock exchange officials and regulators is hampering the development of capital markets in the Philippines. Economic growth has boosted trade in equities, but sectors such as bonds, mutual funds and mortgages are only now beginning to develop.

Yulo's six goals

Jose Luis Yulo, the new president of the Philippine Stock Exchange (PSE), has a dream. Over the next few years, he wants to boost the number of Philippine-listed companies from 221 to 500, establish a bond market, set up a new board to list small and medium-sized firms, extend share ownership to the middle classes through mutual funds and expand the exchange's reach from the capital to the provinces.

The new exchange chief, in office since June, has one other strong desire. He wants the regulatory competition, confusion and internal political wrangling that have dogged the exchange for the past few years to come to an end. If history is any guide, his first five goals may be easier to achieve than the last.

Yulo takes over at the PSE at a time when it is poised to catch up with other exchanges in south-east Asia. Most of the region's stock markets are now moving beyond emerging-markets status, offering more sophisticated products and upgrading to fully computerized dealing and settlement. Bonds, futures and options, mutual funds and even securitization are all on the agenda of the capital markets in the region.

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