Hi! I am Nina Lasala, former Treasurer of the Philppines. This blog is meant to be an open forum for investors, fellow finance professionals, and other interested parties to discuss the state of Philippine Debt Management.

Tuesday, March 08, 2005

BusinessWorld - New Treasurer seeks more consultation on custodian rules

Italicized phrases below are mine.

BUSINESSWORLD INTERNET EDITION

MANILA, PHILIPPINES | Tuesday, March 8, 2005

New Treasurer seeks more consultation on custodian rules

By IRA P. PEDRASA, Reporter

Despite the controversy over a Bangko Sentral order for private banks to be custodians of government debt papers, National Treasurer Omar T. Cruz is not about to ask the regulator to delay its implementation.

After all, he has been told by his boss, Finance Secretary Cesar Purisima, to implement that order -- the very same one that reportedly cost Mr. Cruz's predecessor her job.

But in an interview yesterday, Mr. Cruz also admitted that central bank's third-party custodian rules were indeed beset by "legal, technical, and operating" issues.

Thus, he would prefer to first improve communication lines between Treasury and Bangko Sentral before they take effect.

"Regulators need to know what's going on in our shop, and I want the Treasury to know what's going on at their side, because the two will have to work together at the right time," he told BusinessWorld.

"We all know what the mandate is [from Finance], but at the end of the day, what I would really like to do in terms of this so-called mandate is I'd really want my team to work together hand in hand with all the participants so that we can address all the issues pertaining to this matter. And there are really legal, technical, operating, and backroom issues -- whether they pertain to big or institutional investors or even retail investors," he added.

Treasury officials led by former National Treasurer Norma L. Lasala had openly opposed the central bank's third-party custodianship rules, fearing that these would jeopardize the management of the government debts, among others.

Through circular nos. 392 and 428, Bangko Sentral ng Pilipinas required buyers of government securities, as well as other securities, to deposit these with a custodian, other than his own bank or broker, for safekeeping. But these custodians will still need the Treasury bureau's Registry of Scripless Securities, where they want to open omnibus accounts on behalf of buyers. At present, Treasury handles the trade and safekeeping of all government securities -- bills and bonds -- sold.

Ms. Lasala had believed that her refusal to turn over the registry system to central bank's accredited custodians led to her replacement.

Mr. Cruz said he would continue dialogues with other Treasury officials, "to make sure that everyone is heard and that due process is always followed, and due diligence is done."

He also said that he was willing to meet his predecessors, including Ms. Lasala, to talk about leadership strategies. "I'm an open guy, I'll not monopolize the ideas. Something has to be learned from someone," he said.

"It is not my intention to undo very good things and what Ms. Lasala has put up," he stressed.

During her short stint as Treasurer, Ms. Lasala introduced switch auctions and made use of benchmark rates for the secondary market, among others. "The enhancements don't necessarily have to clash with the other regulators' requirements, we just need to make sure that certain regulatory concerns are also taken into account," Mr. Cruz added.

6 Comments:

Anonymous distressed end-user said...

The new treasurer is off to a good start by saying the right things. Hopefully, he can lower the tension levels.

But just the same, his own observation that the 3rd party custody rules were hampered by "legal, technical, and operating" issues is discouraging and upsetting.

The industry must have paid very good money for a business case study to be made before embarking on this project.

I would have thought that these would be areas that should have been covered by the study since GS forms a crucial part of the profitability of the FIE. Shouldn't there be some accountability for the team that conducted that study since the industry based its judgments on its conclusions and recommendations ???

It's been four years of hard work putting this project together only to see that there are problem areas that are only being uncovered now. 450 million pesos has been put in so far not to mention that 3rd party investors have pitched in for a worthy cause.

I hope the new treasurer can get things moving quickly.

11:05 PM

 
Anonymous Anonymous said...

My first impression with the new TOP is that he is a very well mannered, educated man, gentleman i must say. But more of being a gentleman I wish that I would see in him a leader who would try to defend anything at all cost especially if at stake at this moment is the morale of the people working at the Bureau.

Once we experience to have a good leader and though she may have a very short stay in our office. She taught us with one thing that I will never forget.....to speak for what you believe and be firm for whatever decision you made in your life. Thank you for that former TOP Lasala. We will never forget you.

Sa mga kapwa kong taga-Bureau......minsan na tayong nagising sa katotohanan...wag nating hayaan ulit maging pipi at bingi tayo. Wag tayong matakot sa dating nagtatapang-tapangan...alam nating tama ang tinatahak natin..... who can be against us??? NO ONE ....cause i believe God remain in our hearts!

Ituloy ang laban!!!

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