PSE wants ex-broker for prexy

The Philippine Stock Exchange appears inclined to hire a former broker for the top management post to replace outgoing president Jose Luis Yulo, whose three-year term will end on April 30, a ranking PSE official said yesterday.

PSE governor Francisco Villaroman said while the search committee is presently evaluating the qualifications of the nominees for the position, "there is now a growing consensus in the board toward hiring a non-broker who has had a long experience in the business."

"The lesson we have learned is that experience in securities trading is crucial to running the Exchange. While we ourselves opted to have a non-broker for president over the past years, we overlooked the fact that inexperience can unfortunately create serious problems for the PSE," Villaroman said.

The PSE by-laws mandates the appointment of a non-broker president to avoid any conflict of interest that may arise from having to run the Exchange and a securities firm at the same time. Futhermore, the president must devote his time and interest exclusively to this fulltime job.

Since the PSE's inception in 1992, three non-brokers have assumed the presidency -- lawyer Eduardo de los Angeles, banker Vitaliano Nanagas II and businessman Jose Luis Yulo. Although Villaroman said the board has been in a quandary over the proposal, he stressed there was "nothing in the by-laws which prevent the PSE Board from hiring a former broker to run the Exchange."

"Other businesses hire chief executives with experience in their industry. Even the Bangko Sentral has hired a former banker more than once to be its Governor. Why should we be the only industry that insists on hiring a chief executive with zero experience in the business?" he said.

Villaroman qualified, however, that the search committee has several non-broker nominees in its shortlist, although "many now feel that it's time to look for a former broker for the job who has made a clean and complete break from his former firm."

Among those reportedly being eyed are former Petron chairman and CEO Monico Jacob, former Trade Undersecretary Melito Salazar Jr. and the two remaining non-brokers in the PSE board: former Negros Oriental Rep. Margarito Teves and former Finance Secretary Vicente Jayme.

Jacob, also a former Securities and Exchange Commission associate commissioner, is a strong choice for the position. He now sits in a number of SEC-appointed management rehabilitation committees for financially distressed companies such as Uniwide Holdings. Salazar, who also had direct interaction with the business community as managing head of the Board of Investments, is now with the Monetary Board, the policy-making body of the Bangko Sentral.

The two other former politicians, Teves and Jayme, are now also actively involved in private sector business development. Before his appointment as secretary general of the powerful Economic Coordinating Council, Teves headed a private think tank and policy advocacy group while Jayme is executive director of the Asian Development Bank.

Villaroman clarified that Jose Cervantes, the newly appointed PSE chief operating officer, is not among those being considered. The designation of Cervantes, who used to head the securities firm Phil-Progress Securities, has been questioned by the SEC due to his immediate ties with the brokerage firm.

Bowing to public clamor for reforms in the light of the BW trading scandal, the PSE has agreed to demutualize the Exchange to open up its ownership, as well as increase the non-brokers in the board to a majority of eight members from the present three.