Marcos inherits a still-volatile capital market – Manila Bulletin

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President Ferdinand Marcos Jr. will inherit from former President Rodrigo Duterte a capital market that is currently reeling from the impact of a combination of rising inflation and interest rates, and risks global recession and food shortage.

Data from the Securities and Exchange Commission shows that the size of the stock market relative to the country’s gross domestic product is 91.1% in May 2022.

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It is also below the 93.26% in 2021 and 95% and 106.2% in 2016 and 2017, respectively, but above the low of 85.6% in 2019.

However, the bond market has steadily grown from 32% in 2016 to 50.58% in 2021. It stood at 52.21% in May 2022.

In 2016, fresh capital raised on the Philippine Stock Exchange amounted to 227.25 billion pesos, of which 176.8 billion pesos came from initial public offerings.

The SEC said the amount of fresh capital raised in capital markets (equities and bonds) reached a record high of 234.28 billion pesos in 2021, mainly due to the IPO of Monde Nissin Corporation which raised 55.89 billion pesos.

The figure was also boosted by the IPOs of several real estate investment trusts, the Duterte administration’s biggest contribution to the capital market, as it finally ironed out the provisions of the REIT Act rules that had them. rendered unattractive to property developers.

The amount raised in 2021 is unlikely to be matched this year, as capital raised was only 20.6 billion pesos in May 2022. But the PES said it had already raised 61.92 billion pesos. pesos in June 2022, i.e. 49.4% less than in the first half of 2021.

The amount of securities registered with the SEC begins to recover after falling from a high of 418.93 billion pesos in 2016 to a low of 144.06 billion pesos and 130.05 billion pesos in 2018 and 2019, respectively, registered securities started growing again reaching 249.01 billion pesos in 2020 and 365.13 billion pesos in 2021. It stood at 270.5 billion pesos in May 2022.

Increases in registered capital of Philippine companies have also recovered from 372.66 billion pesos in 2020 to 687.4 billion pesos in 2021. In the first half of 2022, it stood at 280.84 billion pesos.

The amount of investment in mutual funds also increased from 294.7 billion pesos in 2017 (down in 2018 and 2019) to 362.9 billion pesos in 2020 and 444.08 billion pesos in 2021 In the first quarter of 2022, it already amounted to 451.22 billion pula.

Going forward, the SEC said it seeks to maintain an accessible and efficient capital oasis for Philippine businesses, including small and medium-sized enterprises (SMEs) and startups.

To this end, the SEC created the Office for the Promotion of Strategic Investments in SMEs (OASIS). He is responsible for directing efforts to achieve the goal “[email protected]target, that is, by the SEC’s 88th anniversary in 2024, 888 companies should have tapped the capital market for corporate financing or raising capital.

These include crowdfunding portals, debt and equity markets, and companies with government-supervised franchises.

In addition, the SEC aims to simplify capital-raising products and streamline registration processes for SMEs and to encourage investment houses and other financial institutions to design and implement an underwriting program and/or or advice adapted to SMEs.

The SEC also intends to involve multilateral agencies such as the Asian Development Bank and the International Finance Corporation in launching SME-focused investment funds.

It will also challenge existing marketplaces and intermediaries to update and upgrade their systems through the use of SME-friendly Fintech.

The SEC also plans to work with other government offices and the private sector to develop the right ecosystem for SMEs, both developmentally and regulatory.

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