RP needs structural reforms in financial market - Angara

MANILA, Philippines - The Philippines needs more structural reforms in the financial market and level the playing field as far as taxation is concerned to ensure that the sector remains resilient in times of external problems such as the euro crisis, a lawmaker yesterday said.

Sen. Edgardo Angara said that there should be long-term reforms in the sector so that when the euro crashes, it would not affect the Philippines.

“As the once-mighty euro continues to slide down, financial experts and government leaders are becoming worried that a full-blown economic crisis could grip the continent over the coming months,” Angara said.

The euro crash was prompted by fears over Greece’s mounting external debt as well as Spain and Portugal’s troubled banking system.

Angara said this “unsettling” new challenge comes after many economists thought that the global financial crisis was over and the world was finally recovering from the recession.

Furthermore, Angara said that as the international financial markets continue to face stress, the government should exert extra effort to implement the country’s very own financial reforms.

He said countries like the Philippines may be vulnerable to the effects of outside development if there are not enough reforms in the financial sector.

“Emerging economies like the Philippines remain vulnerable to spillover effects of any downturn experienced by other regions,” he added.

In the Senate, Angara was among those who pushed for the Credit Information System Act to help lessen the risk of banks and make credit more available.

The lawmaker also pushed for the Personal Equity and Retirement Account (PERA), a supplementary private retirement plan that will promote long-term savings and promote capital market development.

He said that in the incoming Congress, he would continue to push for amendments in the Bangko Sentral ng Pilipinas (BSP) charter.

“I continue to push for the BSP charter amendments for stronger prudential supervision, as well as the Collective Investment Schemes Law to update the Mutual Fund Law,” Angara stressed.

Moreover, Angara said that the Business Recovery and Insolvency Act (BRIA), which was passed, would modernize the insolvency law and make rehabilitation easier for troubled companies. The Real Estate Investment Trust (REIT), meanwhile, would inject liquidity and stability to the property market.

“Congress is expected to pass more laws that will make the country resilient to the effects of global recession and gear the country to have a more structured and more responsive scheme that will address the pressing economic needs of the Filipino people,” said Angara.