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The securities and exchange commission (SEC) is the main regulator of the capital market in the Philippines, but its resources are insufficient to adequately address its core functions, especially the supervision of capital market participants, and yet it has to address other legal responsibilities unrelated to capital markets. Other agencies also have capital market regulatory responsibilities, creating a fragmented regulatory framework that causes inconsistencies detrimental to the market and to investors' protection. The existence of regulatory arbitrage, supervisory overlaps, and enforcement gaps evidences the need for an active periodic procedure with other financial system regulators to coordinate supervision activities and review unregulated products, markets, market participants and activities. It should include information sharing and analysis of areas where there may be arbitrage, overlap, gaps, and risks to investor protection and market fairness, efficiency and transparency or other risks to the financial system. A clear and consistent risk-based approach for the SEC supervision of capital market intermediaries is needed. The bank secrecy legislation of Philippines impedes prompt access by the SEC to bank account information.

Capital Markets --- Capital Markets and Capital Flows --- Finance and Financial Sector Development --- Financial Regulation --- Financial Regulation and Supervision --- Securities Markets Policy and Regulation

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John J. McCloy, President of the International Bank for Reconstruction and Development, spoke about the prospects for success by the European Recovery Program and the role of Bank in it. He commented on the world leadership role of the United States. He reviewed the five loans the Bank has made to date. He concluded by discussing South America countries and their needs for technical assistance and advice in connection with their development.

Capital Markets and Capital Flows --- Finance and Development --- Finance and Financial Sector Development --- Financial Crisis Management and Restructuring --- International Cooperation --- International Financial Markets --- Private Investment --- Technical Assistance

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Eugene R. Black, President of the International Bank for Reconstruction and Development, echoed the Gordon Gray report regarding the importance of giving the underdeveloped countries a greater opportunity to raise their standard of living. He emphasizes the gradual nature of the development process and describes the obstacles which have to be overcome to accelerate it. He gives examples of Bank lending in support of development. He makes a case for providing grants instead of loans in some situations. He concludes that the United States and other industrial countries, in their own self-interest, should make additional financial and technical assistance available to the less developed countries of the world.

Capital Markets and Capital Flows --- Development Economics and Aid Effectiveness --- Economic Assistance --- Finance and Development --- Finance and Financial Sector Development --- Macroeconomics and Economic Growth

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Eugene Meyer, the recently resigned President of the International Bank for Reconstruction and Development, spoke about stepping down to allow a permanent head to take over operations. He spoke about insurance companies of the nation and how they are an important factor in its social security. He discussed the Bank's lending operations. Most of the funds must be obtained through the sale of debentures in the public markets from time to time. The security behind the Bank's obligations its reserves, its paid-in capital on hand and its ability to call upon its members for part or all of the remaining eighty percent of their subscriptions. He highlighted the importance of the International Monetary Fund which has the task of bringing stability into the chaotic area of international currency exchange. He concluded by saying that whether we live in a borrowing or lending country we can all play our part in improving international relations and in strengthening the forces which benefit men in their daily lives.

Capital --- Capital Markets and Capital Flows --- Debt Markets --- Finance and Development --- Finance and Financial Sector Development --- Insurance and Risk Mitigation --- International Financial Markets

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The Philippines corporate debt and equity markets will need to grow to provide alternative financing sources to support the strongly growing economy and emphasis on infrastructure spend. Capital markets deepening will be an essential pre-requisite for the country's continued economic development. Well-functioning capital markets ensure the optimal allocation and pricing of capital. This enables retail and wholesale pools of capital to be efficiently deployed in a manner that maximizes returns for such owners of capital against their risk profile. Furthermore, there are a number of technical and operational issues that can be addressed, that can significantly improve the enabling environment for and functioning of the capital markets. The result of these factors has been a lack of focus in policy development and implementation that has hampered capital market development. Key issues include: a lack of commitment to reform from key stakeholders that has impeded the development of markets and market infrastructure; an onerous tax environment that has deterred issuance and investment; a continuing need to improve investor confidence by strengthening the quality of supervision and enforcement for market intermediaries and market operators; cumbersome regulatory requirements and processes around issuance, particularly debt issuance; and outdated and inefficient trading and post-trading infrastructure, and governance concerns regarding market operators. In order to effect meaningful change, a capital markets champion is required. This champion should be cognizant of the relevance of capital markets to the country and possess the will and vision to drive legislative, regulatory, and tax reforms. In addition, a commitment to initiate a change in the ownership and governance of key exchanges and enforce policy against entrenched interests will provide considerable impetus for development.

Capital Markets --- Capital Markets and Capital Flows --- Debt Markets --- Finance and Financial Sector Development --- Financial Regulation and Supervision --- Non Bank Financial Institutions --- Securities Markets Policy and Regulation