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 from small investors.

However, since its listing on 15 January, ticker code SDT0704 has not been traded at all okay, it has been traded only once which flies in the face of a listing's...

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