The use of digital tools to make the process of issuing and buying debt securities cost-efficient, convenient and more accessible to both issuers and retail investors will democratize bond investing and help deepen the Philippines’ capital markets.
This is the key message of Finance Secretary Carlos Dominguez 3rd during the listing ceremony of Ayala Land Inc. (ALI) bonds in the e-SIP Portal (e-SIP) of the Philippine Dealing & Exchange Corp..
He said the listing is notable not only because it marks a milestone in the digitalization of the country’s capital market, but also because the issuance is a “testimony to the strength of the country’s fiscal and financial position”
This strong framework enables the Philippine financial market to maintain a low-interest rate environment, “which makes financing investments cheaper and will help power our strong economic recovery,” Dominguez added.
He also commended the Philippine Dealing System Holdings Corp. (PDS) Group for its “excellent response” to his earlier challenge for the PDS to promote greater financial inclusion and help deepen the country’s capital markets through the e-SIP project.
“This electronic system democratizes bond investing. By moving towards digitalization, we are taking away the pain points that discourage companies and retail investors from participating in the capital markets. We are making processes more cost-efficient for everyone,” the Finance chief said.
“Let us continue taking bold steps forward towards a more efficient and more vigorous capital markets system,” he added.
Dominguez said that while achieving the full digitalization of the capital markets will make financial trading more efficient and competitive in the country, safeguards should be put in place to protect e-SIP and other digitalized initiatives from potential cybersecurity threats and other risks.
He noted that e-SIP will not only digitalize the capital markets but would also be beneficial to the environment, as it would do away with voluminous paper-based submissions, which would save millions of trees.
The e-SIP project could also “dramatically generate more liquidity in the market” because it would eliminate the paper-based submission of requirements, which contributes to friction costs in financial transactions, Dominguez said.
“More importantly, this would help fulfill the Duterte administration’s goal of broadening financial inclusion,” he said.
The e-SIP, which is a first in the country, went live last April 21.