PSE considers listing of more government bonds

The Philippine Stock Exchange (PSE) plans to further expand its product offering with the proposed listing of more government bonds, in particular Pag-IBIG and DECS bonds.

PSE president Ramon Garcia said the bond listing is part of the Exchange’s efforts to offer more exciting and innovating products to the public, coming on the heels of the successful listing of the Small-Denominated Treasury (SDT) Bonds last January.

Garcia said they are still discussing with the Home Development Mutual Fund (HDMF), the government’s housing agency in charge of the Pag-IBIG Fund, on how to go about the plan, which would involve the securitization for the secondary market of the agency’s multibillion-peso asset-backed securities.

He added they have yet to confirm with the Department of Education, Culture and Sports (DECS) on the listing of the bonds the department plans to issue, which would be channeled for the construction of school buildings nationwide.

Garcia said the PSE can expand the bond offer even to the proposed Pagcor and SBMA bond issues earlier planned by the Department of Finance.

Last January, the PSE successfully listed the outstanding P30.352-billion in SDT Bonds issued by the Bureau of Treasury, with small investors and overseas contract workers as its main targets.

In contrast with the unpredictable common stocks, these bond issues are almost risk-free since these are guaranteed by the government. Bonds are also less prone to price volatility since they have a fixed coupon rate upon maturity and earn fixed interest rate.

Additionally, trading of bonds are exempted from capital gains tax, stock transaction tax and the documentary tax. – Conrado Diaz