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THE
chamber of thrift banks, which have been complaining
against the new impositions of the Philippine Dealing
and Exchange Corp. (PDEX) to carry out formerly no-cost
service by providers in the trade on government
securities, has found a stronger ally.
A senior
universal bank official testified against the new fees
in a hearing of the House Committee on Banks and
Financial Intermediaries on Tuesday.
In the
same hearing, the foreign-exchange operations of the
PDEX received ample attention—and statements of
anxiety—as well.
Union
Bank president and chief operating officer Victor
Valdepeñas Jr. echoed the resentment aired earlier by
CEOs of thrift banks like Pascual M. Garcia III of the
Philippine Savings Bank or by chamber head Alfredo M.
Yao, who also founded the Philippine Business Bank, or
by BPI Family Savings Bank president Alfonso Salcedo Jr.
At the
hearing, the committee’s vice chairman, Rep. Luis
Villafuerte, said Deputy BSP Governor Nestor Espenilla
had given the complaining thrift bank executives false
hopes by allegedly telling them it was all right for
them to organize themselves into a separate
self-regulatory organization (SRO) to compete with Pdex
and escape its impositions.
Since
the group was legally barred from organizing themselves
into an SRO, the alternate solution was for the Money
Market Association of the Philippines or MART to apply
for the status, Villafuerte said.
He said
the BSP was originally opposed to the idea but
eventually relented.
Villafuerte had support from
Makati
legislator Teodoro L. Locsin Jr., who opposed the broad
plan for the PDEX to eventually operate as a
foreign-exchange platform as well.
Locsin
bluntly asked Deputy Governor Espenilla if the PDEX
charter, with BSP indulgence, would allow the “PDEX
gang” to engage in foreign-exchange operations as well.
PDEX
head Vicente Castillo had to explain that their
involvement in forex operations was as platform for the
Philippine Dealing System (PDS), which is a subsidiary
engaged in the actual business of trading in foreign
exchange.
“The
character of the government securities dealer has
changed because of this element and I don’t appreciate
it, this institutional arrangement which the market
players find of no value,” according to Valdepeñas.
Bankers
Association of the Philippines (BAP) president Ramon Sy
defended the delegation of the PDS role as forex trading
platform to PDEX as part of the need to pursue a reform
program approved years earlier by the board of the BAP,
its owners.
Sy said
the delegation was driven by the need to automate the
system and centralize the entire operations to achieve
greater efficiency.
He
acknowledged some incremental costs were involved but
asserted these were very minimal.
“This
was a step forward in the need to organize the market
and achieve transparency, a system that should not stop
with short-term foreign exchange but to other products
that contribute to capital market development,” Sy said.
However,
Villafuerte asserted the PDEX, left to its own devices,
should not last a day longer without its impositions
having already failed as an exchange entity.
He found
it funny that PDEX would insist on operating as an SRO
as well when, as an exchange, it lost money totaling
P114 million.
“In the
long run the PDEX will survive,” Sy said. |
