Bureaucracy kills Philippine local bond liquidity

The Philippine finance bureaucrats invented a perfect solution but applied it to the wrong problem.

Well-intentioned but impracticable thats how to best describe the Philippine governments attempt to create a secondary trading market for small-denominated bonds.

With much fanfare last month, the countrys Bureau of Treasury BTr listed so-called Small-denominated Treasury SDT bonds on the Philippine Stock Exchange PSE totaling Ps30 billion $626 million. The SDTs come in denominations of only Ps5000 $104, with a 13.625% coupon that is intended as a means of siphoning off excess cash...

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