MANILA, Philippines - Finance Secretary Cesar Purisima has added his voice to the unification of the country’s stock and debt markets.
"The development of the bond markets is something we’re trying to push also. In fact, one of the projects is really to have just one equity and bond market,” Purisima said in a speech.
Purisima said the government is seeking the help of Philippine Stock Exchange Chairman Jose Pardo to pursue the merger with Philippine Dealing & Exchange Corp., where PSE already has a stake.
The plan is "very preliminary,’" Pardo said in a mobile phone text message.
In May, PSE President Hans Sicat said it was ``logical’’ to merge the two because of the size of Philippine financial markets and the possibility that they could share a trading system. At that time, PDEX President Vicente Castillo said he agreed a ``linkage,’’ whether via merger or products.
Castillo is abroad today. (The first version of this story wrongly said he declined to comment.)
PSE owns 21 percent of Phlippine Dealing System Holdings, the owner of PDEX. Other shareholders include the Bankers Association of the Philippines, Philamlife and San Miguel.
Meanwhile, Purisima said he's signed the rules on taxing real estate investments trusts (REITs), saying the transfer of property to REITs will be subject to value-added tax.
REITs are vehicles developers transfer rental assets to and then sell shares in, using the funds raised to develop more property, in a process described as ``recycling'' capital. As an incentive for this, REITs get a tax exemption provided they distribute most of their income to shareholders.
Developers, their bankers and officials of the exchange had lobbied for transfers to be exempted from VAT but Purisima refused, saying REITs should be a way to recycle capital rather than just a way to get a tax break. The two sides already compromised on how many percent of REITs developers can own, after Purisima said the 67 percent allowed in the law again meant too little capital was being recycled in exchange for income tax breaks.