By Angelito C. Imperio
and Maria Rosario O. Lapuz
The enabling legislation for securitization transactions is now being being considered by both chambers of the Congress of the Philippines. The Senate version has passed first reading and is being discussed at the committee level while the House of Representatives counterpart is already on its second reading. The bill, which is a priority economic measure of the current administration of President Gloria M. Arroyo, is likely to be passed into law this year.
Policy Objectives
Both versions of the bill aim to promote asset-backed securities as alternative investment instruments and encourage securitization by reducing legal, fiscal and regulatory deterrents to this type of transaction. The proposed law is expected to help develop the languishing capital market and diversify investment portfolios. Proponents of the bill also hope that securitization will help develop a secondary mortgage market, resulting in benefits such as the
