Sound governance is crucial for capital markets to inspire investor confidence and play an effective role in supporting growth through channeling savings to productive investment. ADB has been active in supporting efforts to strengthen market governance in the Philippines. Previous interventions include support for establishment of an effective legal and regulatory framework, and restructuring of SEC and subsequent capacity building.2 While an effective regulatory framework is now in place and SEC’s supervisory capacity has been considerably strengthened, governance- and capacity-related issues remain to be addressed at the exchange level. The recent listing of PSE shares on the PSE (self-listing) and PSE’s planned divestment of shares, along with plans to establish other securities trading markets, present a new set of challenges and will require SEC to develop appropriate capacity to effectively address them.
