Banks assail Pdex for onerous rules

By Ruben Hortelano

05/22/2008

The Philippine Dealing and Exchange Corp.’s (Pdex) reporting requirements on banks that trade government securities violates deposit secrecy rules, a banker told a public hearing at the House of Representatives.

The requirement has scared away potential clients who normally get their business on the strength of absolute anonymity, Philippine Savings Bank (PSBank) president Pascual Garcia said.

The House committee on banks is conducting an inquiry into the Pdex, primarily the charges it imposes on banks on the trade of government securities.

The Chamber of Thrift Banks said its members trade government securities as an added service and sought the removal of the reporting requirements.

“Our clients now fear going to us for business because mapping rules require banks acting as brokers to file transaction reports with the Pdex. The rule has proven costly and clients no longer go to us for their requirements,” Garcia said. PSBank is the thrift bank unit of the country’s biggest lender Metropolitan Bank and Trust Co. (Metrobank).

Garcia’s statement is consistent with disclosures by Camarines Sur legislator Luis Villafuerte that Pdex impositions have drastically reduced the volume of trade of government securities to only around P6 billion a day from a peak of P30 billion daily.

Banks complain that Pdex requires them to register when acting as broker, and another registration requirement when banks act as dealers of government securities.

Union Bank president Victor Valdepenas criticized the requirement saying that these were instituted “purely for purposes of intervention.”

“These are all committed trades anyway so why should we be forced to pay mapping fees?” Garcia asked.

He said the banks will agree to the Pdex charges if these are lowered.

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