Dominguez criticizes PDS shareholder snub

THE government could put up its own bond system for micro, small and medium enterprises (MSMEs) if Land Bank of the Philippines’ (Landbank) bid to take over the operator of the country’s fixed income bourse fails, a Cabinet official said.

Landbank’s attempt to purchase Philippine Dealing System Holdings Corp. (PDS Group) has hit a roadblock with just one shareholder willing to sell its stake at P360 per share. The state- owned bank, which had previously announced that it would be accepting offers to sell up to April 5, has been forced to reissue invitations to PDS Group shareholders.

“If they (the shareholders) don’t want to sell it, well, fine … It will be very clear now who doesn’t want to develop the capital market . . . shareholders of PSE (Philippine Stock Exchange) and PDS,” Finance Secretery Carlos Dominguez 3rd told reporters.

PDS is the parent company of Philippine Dealing & Exchange Corp.

(PDEX) and Philippine Depository and Trust Co. (PDTC). PDEX is the dealing exchange for fixed income securities while PDTC acts as depository and registry for participants for both fixed income and equity securities.

The PSE, which has a direct 21-percent stake in PDS, also attempted to take control and had secured commitments to sell from majority of the group’s shareholders. It recently declined to renew the purchase agreements, however, after failing to meet regulatory thresholds.

Landbank President and CEO Alex Buenaventura had touted a cash offer of P360 per share, higher than the PSE’s P320 to be paid in shares.

Landbank, which currently owns less than 2 percent of PDS via the Bankers Association of the Philippines, has claimed that the acquisition would support the government’s capital markets development program. MSME bond issuances, in particular, will be promoted via LandBank’s nationwide network.

PDS shareholder procrastination, Dominguez said, “is not going to stop us from doing that (implementing bond issuances) … there are other things we can do we can promote the bond business ourselves.”

“If they don’t want to sell … we will set up the bond system. We can do it,” he claimed.

A department could be created under Landbank or the Development Bank of the Philippines to develop MSME bond offerings.

“It’s still our mandate to improve the capital market,” Dominguez said.