December 12, 2024 | 12:00am
MANILA, Philippines — The Philippine capital market can broaden its investor base if it emulates regional neighbors by enlisting state-owned firms on the stock exchange as proposed by the Organization for Economic Cooperation and Development (OECD).
OECD deputy secretary general Yoshiki Takeuchi yesterday said the government should consider listing some of its biggest enterprises at the Philippine Stock Exchange (PSE).
Takeuchi said some government-owned and controlled corporations (GOCCs) have the capacity to boost the PSE based on the size of their assets alone.
As of 2022, state-owned Land Bank of the Philippines owns P3.14 trillion in assets, posting a net worth of P210.59 billion. Further, the Development Bank of the Philippines (DBP) boasts P1.07 trillion in assets and P80.35 billion in equity.
Likewise, the Philippines remains the only country among the largest Southeast Asian economies that has no GOCCs on its stock exchange. In Singapore, state-owned firms DBS Group Holdings Ltd., Singapore Telecommunications Ltd. and Singapore Airlines are all listed publicly.
These three, according to OECD, include 27 percent of Singapore’s capital market, showing their capability to attract investors even though they are bound by a charter.
Takeuchi said the government can likewise list their GOCCs to build up discipline, as the added pressure of reporting to the investing public can improve performance.
Citing the experience of other countries like Japan, Takeuchi said listed GOCCs tend to be more active and transparent given that they are regulated by government charter and financial targets.
Based on a report by the OECD, the Philippines is home to 118 GOCCs managing an asset base of nearly P12 trillion. The study identified Landbank and DBP as the most prepared to go public, followed by the National Transmission Corp., Food Terminal Inc. and the Philippine Amusement and Gaming Corp.
The Securities and Exchange Commission (SEC), for its part, is undertaking a review on which GOCCs are ready to enter the capital market. SEC commissioner McJill Bryant Fernandez noted that for a state-run enterprise to go public, it has to show a history of productivity first.
Moreover, Fernandez said some GOCCs may require amendments in their charter before they are able to offer shares to investors.
“There is a need to review their respective charters, taking into consideration the mandate of our state-owned enterprises, whether they were made for national development or charity purposes,” Fernandez said.
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