Finance Secrtary Cesar Purisima urged the Philippine Stock Exchange to finally join the Asean trading link after several years of delay in order to boost the local capital markets.
Speaking during the general membership meeting of the Shareholders Association of the Philippines, Purisima said while there would be winners and losers in the planned Asean trading link, the integration was expected to encourage more people into invest in the stock market.
Purisima said some sectors, including the stockbrokers, feared they might lose their business once the PSE joined the Asean trading link.
“There is a pushback because there is fear because obviously there are people whose businesses depend on the exchange and there is competition abroad and they can lose some of the business they have,” Purisima said.
“But in our march towards a better Philippines and better stock market, there will be winners and losers but our goal is to ensure that there will be more winners than losers,” he said.
Purisima said he would like to see more Filipinos investing in the stock market, especially the middle class which has been gaining disposable income.
Only one percent of the total Philippine population is invested in the stock market compared with 33 percent in Singapore.
“I’d like to see more of our people engaged in investing in the stock market. Over the long term period, equity will always outperform fixed income and other asset classes. So it is but fair to give middle income and other sectors the opportunity to gain and have stake in the Philippine economy,” Purisima said.
The Asean Trading Link connects the stock markets of six Asean members and promotes them as a single asset class.
The link, which went live in 2012, so far involves just three bourses—the Stock Exchange of Thailand, Bursa Malaysia and the Singapore Exchange.
The PSE has decided to postpone its participation in the trading link to focus on introducing more products and services to the local equities market in order boost liquidity and improve its chances to being able to complete with other bigger Asean exchanges.
The PSE said it remained interested in joining the link and was part of the other initiatives of the Asean exchanges, such as the Asean Stars and the formation of an Asean index series.
No specific timetable has been set for its planned participation in the Asean trading link.