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.

Saturday, April 23, 2005

Seeking Approval

Seeking approval prior to incorporation Posted by Hello


Anonymous Since when.......? said...

BSP giving imprimaturs to business plans of organizations seeking licenses to operate.... organizations applying even before issuance of a regulation or rule......the circular was dated July 2003 and the letter was as of April 2003.....will somebody please explain these anomalies?

I am flustered...

10:37 AM

Anonymous Anonymous said...

The evidences as presented already confirms the anomalous intents and motives of the Castillo group and the connivance of the BSP leader. They still intend to push through with this? ANG KAPAL!

11:20 AM

Anonymous Anonymous said...

Did the other custodians apply for accreditation at about this time? April? Before circular 392 was released in July 2003?

Can someone please reconcile these dates?

1:51 PM

Anonymous Anonymous said...


1:57 PM

Blogger Gloria Arroyo said...

all of this is above board! promise!

6:33 PM

Anonymous Anonymous said...

It seems that source of the problem is Castillo. Who the hell is this guy anyway? Better yet, who the hell does he think he is?

10:25 PM

Anonymous Anonymous said...

Well, it takes two to tango... so the question is, who is his partner in BSP? Or is it a wild "barkada" party?!

8:34 AM

Blogger ceteris paribus said...

as is par for the course in the Philippines, nothing happened. in spite of mrs. lasala putting all the evidence of the anomalies, our government refuses to do anything!

6:40 PM

Anonymous Anonymous said...

Say Amen brother... that's what is so sad about this country...

8:00 PM

Anonymous the Joker said...

I would like to invite everyone on this blog to congratulate the PDS HOLDINGS CORP and PHILIPPINE DEALING & EXCHANGE CORP on its successful implementation of:

1. The most disorganized "organized market";
2. The most chaotic "efficient market" and;
3. The most divisive "centralized market".

Congratulations folks!!!

Unfortunately, after viewing your excellent track record your services as a custodian will not be necessary.

11:54 AM

Anonymous Anonymous said...

this is for the author of this blogspot: hindi ka na nag-iisa. marami na kayo. Kasama mo na si Valbuena, Yorac and even, Vic Corpus. They did not want to implement something that would be detrimental to the Filipino people. Soon, Senares of NLRC may even be joining you.
What's happening now with the third party custodianship issue? Please update us. Thanks.

10:58 AM

Blogger ceteris paribus said...

I cannot speak for Mrs. Lasala, but what I do know is that the Fixed Income Exchange has pushed through with its launch and is operating. I'm not working in the trading desk anymore but from what I can see it is easy to disintermediate the exchange and trade over the phone.

To date, BTR has not given the FIE connectivity to RoSS so it is really an empty launch since you still have to go through Telerate to do the securities transfer.

What the market is left with is dumbo infrastructure that can't be used. So everybody went out a loser I guess.

1:29 PM

Blogger donj said...

electronic audit trail is not complete if ross is not connected to fie. so who is the authority to decide which market structure (fie vs. otc) is best for the philippines. do they have to go to court to settle the connectivity issue?

11:40 AM

Anonymous Anonymous said...

donj: what are you taking about???

3:24 PM

Blogger donj said...

if the disagreement between btr and fie is a stalemate, who is the authority that can decide to settle this?

6:50 PM

Anonymous Anonymous said...

To Mr. DONJ:

Who cares about PDS, BTr can live without them. PDS can go to Senate or any court if they want to... at least they can have a chance to explain how in the earth BSP came up with circulars that clearly originates from their end.

10:22 AM

Anonymous Anonymous said...

To donj

Now I am convinced that you don't really understand what you are talking about....

11:30 AM

Anonymous Anonymous said...

Donj: What is your understanding of the difference between OTC trading and Exchange trading?

Regardless of what your understanding is, the brand of third party custody preached by PDS is not necessary when you have an electronic, book-entry transfer of securities direct on registry.

12:15 PM

Blogger donj said...

i'm just an investor who is not satisfied with otc. under otc i have to call several dealers to get the best price. also the spreads are wider which is not good for trading. with fie, i expect access on real-time information on best bid/ask price and amount available. i agree third party custody is not necessary if there is ross connectivity with fie. if it is an open system, the problem is not technical.

1:23 PM

Anonymous Anonymous said...

Paging...the Joker

Pakipaliwanag mo nga ulit ke donj for the last time good points ng OTC in terms of price and spread versus the Exchange.... just for the last time, kung di pa rin ma 'gets' hands up na tayo - bigay mo na ang nag-iisang si donj kay FIE!

1:46 PM

Anonymous Anonymous said...

And lets say "Amen "to that in chorus.

4:46 PM

Anonymous Anonymous said...

mahirap makakita ang nagbubulag-bulagan, mahirap makarinig ang nagbibingi-bingihan at lalong mahirap makaintindi ang walang pinaniniwalaan (bukod sa kanyang sarili!!!)

The Joker has eloquently discussed the issues point by point which evidently donj cannot comprehend.

You are an investor not satified with OTC because you need to call several dealers. In the first place, why do you need to call a several dealers when you said you are just ordinary investor? Have you heard about the role of the broker?

Spreads are wider which is not good for trading - What is your basis? Did you run a historical data for OTC transactions and found out that the spread is really wide at 5% level of significance? What is your definition of wide spread? 10, 15, 20...basis points?

Donj, you are confusing yourself, you want to be clarified as an investor but you are chaotically talking about trading? Which is which, or better we simply accept that you don't really has the capacity to understand the investor's vis-a-vis trader's issues.

It will be a waste of time for the Joker to explain again, it's as if your are teaching mathematical operations and the student does not even know how to count...so I guess we better rest our case.

Donj, look for a new avenue to learn -- perhaps do it in your own time, reading research papers or even text books in finance or better yet, enrol in a reputable school.

5:33 PM

Anonymous Anonymous said...


Case 1 - OTC (individually calling the "dealers" about the bid/ask price
Bank A 9.500/10.200
Bank B 9.750/10.125
Bank C 10.000/10.250

Case 2 - FIE (in one board i.e. the PDEx website? since Donj is just an ordinary investor therefore will not be subscribing to an expensive terminal)
Bank A 10.750/10.800
Bank B 10.850/10.900
Bank C 10.900/10.950

Donj, di ba ang choice mo is case 2? transparent ang price and smaller ang spread right?

Ayan,that's what you get for subscribing in a very expensive platform, US$1,000 per terminal per module per month plus PHP900 per transaction. Do you think the banks who will incur this huge cost will not factor it to their prices? The banks are not in the business of losing money, this cost will be factored in their YTM/price and you Donj will be the one paying as you preferred! Goodluck!

Probably the banks will thank you for your generousity!!! You will be one of those investors helping them recover this no-value added-high cost subscription in the FIE.

5:54 PM

Anonymous Anonymous said...

To the above poster ... no need na for the Joker, fully and satisfactorily explained...hahaha! So donj, di mo pa rin gets? Goodbye na and goodluck to your FIE.

6:02 PM

Blogger donj said...

it gives me pleasure if i'm boring you all on what i think. the hypothetical examples do not mean anything much. small denomination bond was once traded at the pse with minimal or no transaction cost. even with a coupon rate of 13.625% there was a time it was traded at 95 discount in the market. i don't know the methodology in the otc benchmarking but the bid price is much higher. let the market dictate the price. bond price goes down when inflation goes up. i don't agree that investor always hold until maturity. if you understand the time value of money there are more opportunities for more profit in trading.

12:49 AM

Anonymous the Joker said...

1. The market for debt is composed of the issuer, the intermediary and the investor. Issuers float debt either for commercial or for capital reasons. Intermediaries may either be dealers or brokers. Investors may either be trading, hedging or investing. These are diverse needs. They need equally diverse solutions. The current formulation of the OTC market is definitely not the proper way of spot securities distribution but foisting an Exchange is definitely not the way either. That is the biggest failure fo the FIE in its implementation - believing it could address the whole market by consulting one section of the market while conniving with the regulators.

2. Unlike share prices that are merely representations of the value of a company interest rates are of seminal interest in the national economy. The debt markets are not slot machines for investors to simply punt (buy-low, sell-high) causing yields to gyrate all over the place. That manner of volatility makes issuance of debt and with it conduct of business completely unattractive. We have enough going against our country in terms of business environment.

3. Your assumption of access to the best price in any market OTC, Exchange or whatever is tenuous. If you do not have established relationships with the owner of the best price (ie depositary or credit) there is slim to no chance of your dealing that price. This FIE creature of yours is not a central counterparty.

4. Where is the liquidity needed to power your government securities exchange when on the issued date of a government security 100 percent of the issue is in the hands of the dealers - whose market by definition is OTC?

5. Where is the private securities market coming from given the investment houses that float private debt have been priced out of the market?

These are but some of the really serious issues facing the market. The FIE is nothing more than a half baked solution that has harmful side-effects in its attempt at a cure.

If you still do not understand, please read up. You have been foisting the same argument with no substance whatsoever.

You are probably just posting to annoy other persons on this blog. We over here clearly understand our position in detail. You come here espousing what might work. You are no different from the FIE in proposing a soultion without fully understanding the problem. Speculate on the market by all means, it's your capital but do not speculate on this board...

11:58 AM

Anonymous the Joker said...

One more thing,

Let's take the discussion of Exchange versus OTC elsewhere. Each has its merits and each has its pitfalls.

Besides, like it or not, the FIE is already up and sputtering.

Let's concentrate on our issue here folks,

This blog discusses the need for third party, not affiliated with the seller, custody for securities. This one is the more serious issue because it is a proposal that does not solve anything, in fact:

1. It affects the ability of an issuer and his or her issuing agent to manage outstanding debt.

2. It encroaches on the right of a registry to properly keep detailed lists of registered owners/holders in due course

3. It disenfranchises banks of their asset management functions.

4. It interferes with the right of the investor to his or her property; a right that includes the power to designate on an unqualified basis the disposition of his or her assets post-sale.

12:14 PM

Blogger donj said...

very interesting. anyway good luck to you. i just hope our bond market would develop to meet the diverse needs of various players in the field.

12:31 PM

Anonymous Anonymous said...

YES....that's it Joker, this is the last chance for donj to redeem himself, if he still doesn't get it - let go of him bigay mo na sa FIE!

6:20 PM

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