FINANCIAL MARKETS DEBATE

(SCRIPT)

ISSUE: "Does Philippines works mostly on financial institution rather

than on financial markets?"
STAND: Not Favor

JOSE: Good day everyone, this is Ronnie Jose

DISA: I am John Vinceth Disa
Hernandez: I am Sheila Mae Hernandez
Lunato: I am Christine Lunato
Mabbayad: And I am Stephanie Anne Mabbayad
JOSE: And together, we claim that Philippines does not work mostly on
financial institutions but also on financial markets.
To support this claim, we have 3 oppositions to argue.
First and foremost, we argue that there is a significant improvement in the
Philippine Financial Markets since the Asian Financial Crisis.
Second, we argue that the Philippine Financial Market is still having a great
performance in the face of Covid-19 Pandemic.
And lastly, we argue that the Philippine government is not the only one
which works mostly on financial markets but as well as the people of the
Philippines who have a great part in working with it.
To present with you our facts, statistics and evidences, I will turnover the
microphone to my co-speakers Ms. Hernandez and Ms. Lunato for our first
argument.

1st Argument: “There is a significant improvement in the Philippine

Financial Markets since the Asian Financial Crisis”

Lunato:
 To begin with, it is said that large financial markets with lots of trading
activities provide more liquidity for market participants. Here in our country,
we have the Philippine Stock Exchange. The year 1927 saw the first capital
market begin trading in the Philippines, with the opening of the Manila Stock
Exchange (MSE). After 3 decades, in the year 1963, the Makati Stock
Exchange joined. Eventually, in 1992, the Manila Stock Exchange (MSE) and
Makati Stock Exchange merged resulting with the present, Philippine Stock
Exchange. This unification of both stocks is one of the serious reforms that
our country had undergone in order to strengthen the capital market.

Hernandez:
In 1997, when the Asian Financial Crisis emerged, Philippines is one of
those countries that experience such financial crisis. According to the
statistical data presented by SIR Inc. Roy Mijares, from 1996 to 1997, the
nominal GDP per capita dropped by 43.2% in Indonesia, 21.2% in Thailand,
19% in Malaysia, 18.5% in South Korea, and 12.5% in the Philippines. In
this case, if the nominal GDP per capita of a specific country dropped, it
clearly shows a recession. But as you can see, compared to the other Asian
countries, the Philippines was not badly affected. Why? Because of the
following reasons:
1. Steady peso-dollar rate was maintained by the government as a policy -
the one is to one exchange rate.
2. Exports wherein in the same year of financial crisis, the merchandise
exports grew 22.2% in (nominal) U.S. dollar terms, which is higher than
South Korea, Malaysia, Indonesia, and Thailand.
3. Overseas Filipino Workers (OFWs)

Lunato:
Furthermore, according to the presented data of Odhiambo and
McMillan, The Philippine stock market has experienced phenomenal growth
in recent decades. The market capitalization ratio experienced an upward
trend. The ratio increased remarkably from 13% in 1990 to 92% in 2014,
with an average annual growth of 8%. As a result, the global ranking of the
stock exchange improved from 55th in 2005 to 12th in 2014 as measured by
the market capitalization ratio.
Hernandez:
Thus, based on the resulted data in market capitalization ratio, we
argue that even if the Philippines had the least liquid stock market in terms
of turnover ratio among the ASEAN-5 countries during the past two decades,
the Philippines had the advantages when it comes to stock market. Clearly,
improvement was shown in the Philippine Financial Markets since the Asian
Financial Crisis and up until today, the continuous improvement and growth
of our local financial market can still be seen.
To further elaborate our claim, we will now turn over the microphone to Mr.
Jose as he presents our 2nd argument.

2nd Argument: "Philippine Financial Market is still having a great

performance in the face of Covid-19 Pandemic."

Jose:
As Covid-19 started to cause the pandemic, affects millions of lives,
and impacts all business sectors here in our country, local financial markets
remained resilient despite the trying times brought by this pandemic. This
was stated by the Financial Stability Coordination Council on June 2020.
According to the Bangko Sentral ng Pilipinas Governor Benjamin
Diokno, we can't deny the fact that COVID-19 pandemic certainly caused so
much damage in many aspects of our life. However, based on their reading
of market conditions, it is clearly stated that financial market remained to be
strong.
We are also confident to say that the April 2020 edition of Financial
Stability Report showed no signs that our local financial market is in serious
and in immediate danger.
As a matter of fact, the Financial Stability Coordination Council,
including the Bangko Sentral ng Pilipinas, Department of Finance, Insurance
Commission, Philippine Deposit Insurance Corporation, and the Securities
and Exchange Commission, they all monitor the buildup of systematic risks
in the local financial system and create policies to minimize the impact of the
said pandemic.
In line with this, we also argue that the capital market here in our
country is doing very well more particularly on November last year.
According to the Philippine Stock Exchange report, despite the global
economic shock triggered by the COVID-19 pandemic, capital market
remained to have a strong performance.
The Philippine Stock Exchange started a capital raising and it has been
a robust in 2020 in spite of the pandemic. Statistically, according to the
President of Philippine Stock Exchange, Ramon Monzon, the average trading
volume per day was worth P12.66 billion in the month of November. Daily
trading volume is the number of shares that are traded per day. Imagine,
compared to the period of January-October 2020 which has a daily average
of P6.7 billion, we can say that it doubled the amount just in the month of
November.
Let me introduce to you those firms and corporations that raised their
funds during pandemic through the stock market which is the Philippine
Stock Exchange.
We have the:
1. Converge ICT Solutions
2. Megawide Construction Corp. (Megawide)
3. San Miguel Corp. (SMC)
4. MerryMart Consumer Corp. (MMSC)
5. Cemex Philippines (CEMEX)
6. AC Energy Philippines (AC Energy)
7. Century Properties Group (CPG)
8. Altus Property Ventures Inc. (APVI)
9. Ayala Land Real Estate Investment Trust Inc.
As for 2021, it is forecasted by the Philippine Stock Exchange that this
year is a positive year for the stock market as more firms will turn to
equities to raise capital as banks keep lending requirements tight.
To further elaborate our claim, I will turn over the microphone to Mr.
Disa and Ms. Mabbayad as they present our third argument.

3rd Argument: "Philippine government is not the only one who works
mostly on financial markets but as well as the people of the
Philippines which have a great part in working with it."
Disa:
During the outbreak of coronavirus last year, the unemployment rate
got increased, businesses got closed and slowdown, and the stock market
crashed to its lowest level. But it is not the reason to stop on gaining
capitals. Well in fact, some investors use this opportunity as a reason to find
another way to make a money while staying at home which is through
investing in stock market. One of those investors is Emil Ongchuan.
Let me tell you his story. Emil Ongchuan is a business man and a
restaurant owner. After the lockdown shut their malls and sent their shares
crashing, he began to invest 3,000 pesos in March 2020, buying stocks in
builders Ayala Land Inc. and SM Prime Holdings Inc. As he grows more
comfortable with the market, he plans to raise that amount to more than
100,000 pesos. He once said, “I have the time now to focus on day trading
but when the lockdown is lifted, I’ll definitely be changing my strategy to
something more long term.”

Mabbayad:
In addition, according to AAA Southeast Equities Inc. President William
Matthew Cabangon, the number of customers who opened their accounts
has doubled since the lockdown started in the Philippines. With this, it is
seen that there has been a significant increase in retail investors activating
dormant accounts and topping up investments.
In order to continue the rapid rise of the Filipino retail investor, online
trading is of much help. As of now, retail investors are finally participating
actively in the capital markets, and that's definitely a good sign that people
are much more aware with our financial markets.
However, aside from seeing more local and retail investors, the
Philippine Stock Exchange is also looking forward for the new investors to at
least study the basics of stock market before investing.
Statistically, according to the President of Philippine Stock Exchange
Ramon Monzon, local investors in 2020 make up 25.9% of total retail
investors versus 18.2% in 2019. As for the year 2021, local investors, both
retail and institutional, actively traded in the stock market in the first month
of the year.

Disa:
 Now, for those aspiring investors, they might often hear that there is
no better time to start investing than now. While this is generally true, what
if the word “now” is during this time of pandemic? Should you or should you
not? It’s definitely a YES answer. Now is the time for us, people, to invest.
Having a pandemic shouldn’t scare us in investing in the stock market
especially when prices are down. However, it is a must to tread carefully
especially in an extremely volatile market such as the Philippine stock
market.

CONCLUSION
Jose:
As we presented to you our arguments supported by their respective
facts, statistics, and evidences, we therefore conclude that the Philippines as
a whole doesn't only focus on financial institutions but also works mostly on
financial markets.
From the history itself that showed that the Philippine Financial Market
is having a great improvement during financial crisis, to the mere fact that
this crisis is happening again which is due to Covid-19 Pandemic and yet our
local financial market such as capital market maintained to be strong and is
still showing a great performance.
It is also true that people are of great part in the functioning of our
financial markets. With those local investors who are choosing to invest in
such stock markets, they make themselves a huge part of it. Without them,
our Philippine Financial Market won't be strengthened. We mentioned that
now is the right time for us to invest in stock market. It is indeed true and if
majority of people will do the same thing, it would be a win-win situation for
them and for our financial market.
Above all, we are definitely affirmative with our stand.

Jose: Again, I am Ronnie Jose

Disa: I am John Vinceth Disa
Hernandez: I am Sheila Mae Hernandez
Lunato: I am Christine Lunato
Mabbayad: And I am Stephanie Anne Mabbayad
Jose: And together, we're signing off.