OUR economic history tells us that the Philippine financial sector is highly vulnerable to external shocks, as the 1997 Asian financial crisis showed. To shield us from a boom-and-bust cycle and ensure continuous long-term economic growth, we need to achieve market stability in our financial sector.

Last Congress we passed the Lending Companies Act, which creates a regulatory framework for lending companies in order to avoid disastrous pyramiding scams, such as that of the Multinational Telecommunications Investment Inc. (Multitel) in 1998.

The Personal Equity Reform Act (Pera) and Credit Information System (CIS) almost got passed, both bills having been approved by the Senate. Similar versions of the bills were also passed in the House of Representatives, but the bills failed to get ratified in the bicameral conference. I have refiled these bills in the Senate, and am positive they will be passed this time.

The Pera bill will supplement the existing government-sponsored pension scheme by setting up a privately funded retirement fund. It allows private individuals to set aside P50,000 a year, withdrawable when the contributor reaches the age of 55, and tax-exempt.

It will encourage long-term savings and reduce our heavy reliance on the already overwhelmed publicly funded retirement scheme. Pera targets overseas Filipino workers and small business owners, as they are not covered by the government’s current pension programs.

The CIS will gather credit information from financial institutions, such as banks, credit-card companies and government lending institutions. By making reliable credit information available to lenders, they can manage credit risks better and, in effect, will lower the cost of credit and reduce the reliance on physical collateral.

Its greatest benefit is making credit more available, especially to small yet responsible borrowers, as their good track record in paying their obligations will be made known to the financial institutions.

I have also refiled the Pre-Need Code, which establishes rules to govern the operations of preneed firms and provide protection to consumers; the amendment of the Bangko Sentral ng Pilipinas charter, which empowers it to better oversee the banking system; and the Corporate Recovery Act, which seeks to improve insolvency procedures to make the debt-recovery process more efficient and gives insolvent companies a chance to recover from liquidation.

I have also revised my previous bill, the Revised Investment Company Act, into the Collective Investment Schemes Law (CISL). The CISL will establish a comprehensive regulatory framework for all forms of collective investment schemes (CIS) and eliminate existing differences in regulating them.

Through this bill, I hope to balance the interests of the investors by giving them more flexibility to expand their CIS businesses, but, at the same time, institute mechanisms that will safeguard the public interest.

Besides these measures, I have also introduced the Real Estate Investment Trust Act, which shall establish a legal and regulatory framework for real-estate investment trusts. I shall discuss this bill in more detail in next week’s column.

With continuous advances in knowledge and technology, the global financial market is often in a state of flux. Through this financial reform agenda, it is hoped that the Philippine economy adapts to the fast-paced demands of the global market.

Mr. Angara is the chairman of the Senate Committee on Banks and Financial Institutions. Web site: www.edangara.com; e-mail: edgardo_angara@hotmail.com

SPEAKER Jose de Venecia Jr. recently called for a “Marshall Plan” in Mindanao to solve the ongoing conflict in the area once and for all, particularly in certain places like Basilan and Maguindanao. It’s a call that is supported by Sen. Gregorio Honasan, who, as a former soldier, saw extensive action in Mindanao a few decades ago.

The silver lining of a financial crisis is never easy to find. This time, Asian stocks, including Hong Kong shares, may benefit from the Federal Reserve’s attempt to deal with the US subprime mortgage debacle.

If your stock-market portfolio usually amounts to P5 million or less, you will probably fall into one of three categories.

SEN. EDGARDO J. ANGARA: Financial reform for market stability

OUR economic history tells us that the Philippine financial sector is highly vulnerable to external shocks, as the 1997 Asian financial crisis showed. To shield us from a boom-and-bust cycle and ensure continuous long-term economic growth, we need to achieve market stability in our financial sector.

New energy czar Angelo Reyes would do well to take a paradigm shift on the matter of energy and take the view that what is inherently good for the previous department he headed is not necessarily the right focus for the new department he is in now.

With equities in the region slumping and currencies and bonds volatile, small investors in Asia don’t have many places to hide from the subprime rout.

At first blush, it’s hard to imagine a crasser claim or a nervier lawsuit than the one against the American Red Cross over its rights to the red cross.