Philippine Debt Management Issues

Government's Financing Program

2005-07-26T14:45:00.000+08:00

Familiarization with accounts used by Government in its Financing Program is necessary for certain statements to lend itself to meaningful analyses: Some such accounts follow:1. REVENUES of which, BTR Income2. EXPENDITURES of which, interest payments3. SURPLUS/(DEFICIT)4. FINANCING External (NET) External (Gross) Project Loans Program Loans

Transparency: a Pillar of Governance

2005-06-28T15:04:00.000+08:00

Starting July, I shall begin presenting the accounts that are part of the cash program of the government and open discussion on select items or activities that underlie these accounts . For easy reference of the readers, these data are found in the Bureau of the Treasury's statistical series published in BTr's website. It is hoped that with this forum, we can learn and start to pitch in in the

In the interest of...........

2005-06-02T08:45:00.000+08:00

Reproduction of BAP's May 16, 2005 letter to all Member Banks May 16, 2005TO: ALL MEMBER BANKSRe: Ownership of the MART1 and MRTN Data This is to inform you that the BAP BOARD at its meeting on May 12, 2005 adopted the following resolution pertaining to the ownership of the MART1 benchmark and who has the right to dispose of it. RESOLUTION NO.

SPOT THE DIFFERENCE - Third Party Custodianship Rule vs. Cash Management Center Project (Paging COA and the OMBUDSMAN)

2005-05-24T13:52:00.000+08:00

In a letter of 25 April 2005 addressed to the President of the Bankers' Association of the Philippines, BSP Officer-in-Charge wrote that "As a consequence of the aforesaid letter (of COA), the BSP Monetary Board in its Resolution No. 519 dated april 14, 2005, instructed as follows:a.) That CMC should be suspended in the meantime; and,b.) That a letter be prepared for the COA chairman informing

DAFT Circular Letter

2005-05-23T18:06:00.000+08:00

The Office of the new BSP Deputy Governor, Supervision and Examination Sector circulated a draft circular letter, supposedly, among all supervised institutions (NOTE THAT THE BUREAU OF THE TREASURY IS NOT A SUPERVISED INSTITUTION)Excerpts from the circular letter:To: All Banks and Non-Bank Financial Institutions Under BSP.The Subject: Guidelines that will implement the Delivery by the Seller of

Decrease Revenues and Increase Costs

2005-05-13T18:37:00.000+08:00

In yesterday's issue of BusinessWorld, I came accross an article that read,"The country’s pioneer fixed income exchange wants regulators to ease trading restrictions to make it easier to trade debt securities between private investors and tax-exempt state entities.Doing so will help improve trading volumes on the Fixed Income Exchange by allowing entities like state pension funds to participate

Seeking Approval

2005-04-23T07:23:00.000+08:00

Seeking approval prior to incorporation

Coincidence or Under the Influence

2005-04-14T19:11:00.000+08:00

For all of you guys who participated in the survey, here is a chance to validate your gut instincts. Obviously, all of you were expressing an opinion or a judgement based on what you have read so far. It is now your chance to comment on these documents that I am posting for you to decide for yourselves whether your instincts were correct or not. You be the judge! Coincidence or Under the

"Et Tu , Brutus ?"

2005-04-07T14:16:00.000+08:00

SEQUENCE OF UNFORTUNATE EVENTSAPRIL 24, 2001 - BAP CONSULTING, INC.WAS INCORPORATEDNOVEMBER 20,2002-THE CHAIRMAN OF THE BAP OPEN MARKET COMMITTEE (who later became the president of BAP CONSULTING, INC. ) WROTE THE BSP RECOMMENDING THE FUNCTIONS OF A CUSTODIANFEBRUARY 6, 2003-BAP CHAIRMAN, OPEN MARKET COMMITTEE (Who later

"A ruse by any other circular letter is still a ruse"

2005-04-07T14:00:00.000+08:00

I can understand how discombobulating it is to be at the receiving end of the following:(A) BSP Circular-Letter dated 31 March 2005: Reduced Statutory Reserve under Circular No. 444 OFFICE OF THE DEPUTY GOVERNORSUPERVISION AND EXAMINATION SECTORCIRCULAR-LETTERTo: All Banks and Non-Bank Financial Institutions with Quasi-Banking Functions (NBQBs) Concerned This is to remind all concerned banks

What Do You Think? Make your voice heard!

2005-03-29T17:54:00.000+08:00

I thought it would be interesting for all of us to get a feel what reader sentiments are at this point. So, I urge you to make your voice heard and answer this poll question:Based on what you have read on my Blog, do you believe that the FIE has influenced the BSP's policies on 3rd Party Custody?YesNo Free polls from Pollhost.com 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,

Questions an Investor in Philippine government Securities might want to raise....

2005-03-08T10:27:00.000+08:00

RE Circulars 392 and 428 - Questions a Small Investor, Regulator, Government, PDS investor, a GSED, an Accredited Third Party Custodian, Mid-office personnel, Backroom or Support Personnel, Compliance Officer and a BAP member might want to raise ……A. QUESTIONS OF AN INVESTOR IN GOVERNMENT SECURITIES1. What added safeguards can I expect to enjoy under this new regime with a 3rd party custodian?

Executive Brief on Circulars 392 & 428 issues

2005-03-06T10:49:00.000+08:00

SUMMARY OF THE ISSUES INVOLVED IN THE IMPLEMENTATION OF BSP CIRCULAR NOS. 392 AND 428I. SALIENT FEATURES OF BSP CIRCULAR NOS. 392 AND 428BSP Circular No. 392 which was issued on July 2, 2003 and Circular No. 428 issued on April 15, 2004 are the two (2) circulars which created the THIRD PARTY CUSTODIANS. Essentially, these circulars provided for the following:1. Banks and Non-bank financial

A PowerPoint Presentation on the Key Issues of Third Party Custodianship

2005-03-04T13:11:00.000+08:00

Third Party Custodianship and Request for Connectivity Slide 2 Slide 3 Slide 4 Slide 5 Slide 6 Slide 7 slide 8 slide 9 Slide 10

Corporate Governance and PDS Holdings

2005-03-03T21:22:00.000+08:00

As I was looking at the tabulation of shareholders of PDS Holdings, several ideas came up which certainly could stand rigorous examination:I. The business proposal was crafted initially by BAP and IHAP. IHAP now has a measly 2.53% stake in the business. But then again, IHAP did have a position paper against 392. Is this a lack of faith on their part?II. The IT vendors are 20% equity holders.a)

BREAKDOWN OF SHAREHOLDERS OF PDS HOLDINGS CORP.

2005-03-03T15:26:00.000+08:00

From Mar. 2.2005 BusinessWorld Article - Bankers need P50M more for fixed income exchange“…The exchange's shareholders are: BAP with a 38% share; Philippine Stock Exchange, 12.22%; Development Bank of the Philippines; 3.85%; Financial Executives Institute of the Philippines; 3.85%; San Miguel Corp., 5%; Investment Houses Association of the Philippines, 2.53%; Tata Consultancy Services Ltd., 10%;

2005-03-02T21:19:00.000+08:00

PDTC Articles of Incorporation

Good Governance / Bad Governance

2005-03-02T17:21:00.000+08:00

GOOD GOVERNANCE / BAD GOVERNANCEWhen I took my oath of office in 16 November 2004, the former finance secretary told me to approve the request for connectivity relative to the proposed Third Party custodianship proposal under BSP Circulars 392 and 428 as it would spell good governance. Perturbed about what that meant, I thought I’d ask her later. How can I approve something without my having

Goodbye and Hello

2005-03-02T17:12:00.000+08:00

Dear readers,Yesterday was my last day as the Treasurer of the Philippines and today I woke up as a private sector person once again. For all of you that have sent me comforting words of support, my deepest gratitude. The last three months were interesting to say the least. Readers have told me that they wish that some of the posted items were more legible. I promise to take better care

A message to the posters of my blog

2005-03-01T21:03:00.000+08:00

To all the readers and participants of my blog,There is an anonymous comment on the BusinessWorld Article I posted today regarding the resume of my successor. There is definitely, on the one hand, a public interest issue at stake in terms of getting to know who our government officials are and their qualifications for having gotten the job. Definitely, that is what a proper due diligence process

Better late than never - a message from fmr. Treasurer Sergio Edeza

2005-03-01T16:18:00.000+08:00

I got this text message on my cellular phone late this afternoon from my predecessor in my post as Treasurer as well as my former colleague at the Central Bank, Sergio Edeza. While at times, I must admit that my embattled position has been a lonely struggle, Mr. Edeza's text is a most welcome and warm gesture. Many thanks!!!!!!---SMS Text Message in Full---"Hi Nina, Omar would like to meet u tom

BusinessWorld Article: New Treasurer to uphold securties custodian rules

2005-03-01T11:58:00.000+08:00

BUSINESSWORLDMANILA, PHILIPPINES | Tuesday, March 1, 2005 New Treasurer to uphold securities custodian rules National Treasurer Omar T. Cruz vowed yesterday to abide by the Department of Finance's order to implement the controversial third-party custodian rules. He also said he would

COA pushes for cancellation of e-Card deal

2005-02-28T11:10:00.000+08:00

I kept this in draft form and was unable to post this yesterday. The article below illustrates the dangers of "outsourcing" functions without proper analysis conducted by the affected government agency. As you can see, if you were in UnionBank's shoes, this development is frustrating since they must have already spent good money in developing the system. Oversights or shortcuts on due diligence

Italian Treasury As A Model for Valuing RoSS

2005-02-27T22:49:00.000+08:00

Over dinner this Sunday evening, conversation turned to the issue of RoSS as a public utility and infrastructure. One of my friends observed that if private sector were going derive value from charging for services, then why can't RoSS be viewed like the MWSS where 2 private operators won out in the bidding.Going by the PDS official's own estimate of PhP500 million a year in fees, I could then

The Ombudsman and The Need for Public Bidding of Strategic Government Assets / infrastructure

2005-02-27T16:27:00.000+08:00

Interestingly, the PDS* presentation to the Bureau of the Treasury in 24 November 2004 cited MTS Italy as example of a developed fixed income market ( copy of powerpoint slides from PDS is attached as Annex 1). In the same slide, PDS indicated that in 1988-together with Bank of Italy, the Italian Treasury established the framework for a centralized fixed income market through legislation.

2005-02-27T16:26:00.000+08:00

Scanned handouts from Powerpoint presentation of PDS Group

2005-02-25T21:42:00.000+08:00

This is Page 8 from the FIE Study dated 2002. I understand from the study that a management consulting firm had been engaged to complete a business case study for the Bankers Association of the Philippines and the Investment House Association of the Philippines.Again this is obviously way before I ever took on the post of Treasurer.I noted that one of the asserted weaknesses of the current

My comments on the GSeD letter to the investor

2005-02-25T20:37:00.000+08:00

The images of the GSeD's letter and the attached news article furnished me by a GS investor is a helpful recounting of events. As early as July 2004, the dealers were already communicating the options available to their investors. As you can see with the dealer's attachment, RoSS was one of the options brought forward.This letter was obviously sent out prior to my assumption of the post of

2005-02-25T20:04:00.002+08:00

Xeroxed attachment of a Sept 6 2004 article in the Inquirer furnished by dealer to its investor

2005-02-25T19:55:00.000+08:00

An investor furnished his letter from his dealer

2005-02-25T16:09:00.000+08:00

As I promised in my earlier post of the minutes of the meeting I had with the BAP, this is the email letter of Bert Reyes cited.

Comments on PDTC Cost Calculation quoted in Feb. 25, 2005 Edition of Philippine Star

2005-02-25T09:47:00.000+08:00

An article in the Business page of the Philippine Star quotes a PDTC official as stating "... that the cost would only be one 16th of one percent per annum as based on the estimated P1.6 trillion worth of securities that has been issued by the government, 50 percent of which are being traded, resulting in a cost of only P37.5 million per month." Moreover, he challenged our own calculations of the

Minutes of BAP Meeting February 8, 2005

2005-02-25T09:06:00.000+08:00

Below is a copy of the minutes of a meeting I had with BAP and the various custodians. I chose to copy and paste the document from the original Adobe PDF format rather than post each page as a picture for clarity and ease of reading. I will post the attachments mentioned in the document in a subsequent post. MEMBERSHIP MEETING WITH TREASURER NORMAL L. LASALA February 8, 2005, 4:00 PM, BAP Office

2005-02-24T19:21:00.000+08:00

page 4 of IHAP Position Paper

2005-02-24T19:19:00.000+08:00

page 3 of IHAP position paper

2005-02-24T19:18:00.000+08:00

page 2 of IHAP position paper

2005-02-24T19:17:00.000+08:00

Position paper of IHAP expressing concens over BSP Circular

The Dematerialized & Registered Philippine Treasury Bills/Bonds

2005-02-24T18:51:00.000+08:00

The following is an article written by former Treasurer Caridad Valdehuesa, who presided over the design and implementation of RoSS:Philippine Government securities were initially originated, serviced and redeemed by the Central Bank of the Philippines as fiscal agent pursuant to its 1950 Charter. Treasury bills and bonds were printed by the Central Bank Security Printing Plant and delivered to

2005-02-24T18:47:00.000+08:00

page 2 of Bert Reyes' Memo to Treasurer Figueroa

2005-02-24T18:44:00.000+08:00

Memo of Bert Reyes to former Treasurer Figueroa

2005-02-24T17:52:00.000+08:00

Take a look at the capabilities of RoSS

My Reply to the an article in the Today Newspaper Feb. 21, 2005

2005-02-24T17:27:00.000+08:00

We write in response to the article published in yesterday’s issue of TODAY. The article was unfair and misleading. It did not constitute balanced reporting as the side of Treasurer Norma L. Lasala was not sought. It was written with an obvious slant in favor of the Bangko Sentral and an attempt to denigrate the character of Treasurer Lasala. Please consider the following:It was reported that the

Welcome to my Blog!

2005-02-24T11:48:00.000+08:00

Dear friends, colleagues and fellow finance professionals,I am Nina Lasala, the current Treasurer of the Republic of the Philippines. I am writing this Blog to document the events, considerations and decisions I have had to undertake during my tenure. I believe I owe it to myself, my family and for historical references to discuss the many complex issues in detail.As some of you may be aware,