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Financial Markets and Institutions(FMI) | Philippines
- 1. Section -A | Group - 6 Financial Markets & Institutions Philippines
- 2. Introduction 12th largest economy in Asia Transition from Agriculture to services and manufacturing. Under supervision of IMF for decades. Asian Financial crisis 1997 Currency - Philippine Peso Subunit - Centavos 1949 - establishment of central bank and currency introduced
- 3. Short term money market Foreign exchange market Fixed income market Hedge fund market Insurance market Financial Markets
- 5. Mutual fund in Philippines The Philippine peso-denominated mutual funds amounted to a total AUM of Php329.4 billion as of the end of 2020. BPI Investment Management, Inc. dominated the industry with a 49.8% share of the total AUM The total AUM for the foreign-currency-denominated mutual funds amounted to Php71.0 billion as of the end of 2020
- 6. Major Equity Indices PSEi Composite Index Philippines Stock Exchange Composite Index 30 common stocks Broad-based index Indicates the business climate of Philippines Additional Indices FTSE Pihilippines Index PHS All Shares
- 7. Equity Market Has one of the oldest stock exchanges in Asia but still smallest. 84% of GDP Focus changes from family businesses to entrepreneurs Lack of fully developed financial system is challenge. Difficult to hold its position in the country due to Capital outflow Lack of opportunity Political instability Venture Capitalist
- 8. Debt Market Dominated by Government Securities. GS account for 79% of the total debt outstanding, accounting for 34% of GDP. Expanded at a compound annual interest rate of 7% since its inception. Bonds: Corporate bonds were relatively liquid with a turnover rate of 4.5 percent of outstanding shares. 1. 2. 3. 4.
- 9. Derivatives Market Universal and commercial banks have been involved in derivatives. The MIFE (Manila International Futures Exchange) was established as primary commoditive and derivatives exchange. Treasury Bills were the first financial futures contract to be traded in 1990. Derivatives should be registered with SEC before they are issued or sold with exception of those issued by banks and those exempted from registration. 1. 2. 3. 4.
- 10. Banking System: Universal Banks and Commercial Banks Other Institutions: Consumer Finance Companies, Rural and Cooperative Banks, Thrift Banking Systems Financial Institutions
- 11. The Philippine Stock Exchange No. of listings: 275 Indices: PSEi Market cap: โฑ 18.53 trillion Major Stock Exchange
- 12. Financial Regulators in Philippines Bangko Sentral ng Philipinas (BSP) Foreign Exchange Regulations Provides guidelines for Establishment of Banks Securities and Exchange Commission (SEC) Acts as Registrar and overseer Examines Financial Statements Regulates Capital Market Finance and Insurance Commission Help Create Protect 1. 2. 3.
- 13. Challenges with the Financial System Lack of Financial Transparency Lack of openness External Auditors Rumour- Driven system Lack of Unified Regulators Lack of coordination Institutional Capability Unable to manage Potential Risk Exposure High Market Volatility 1. 2. 3.