THE Philippine Dealing System Holdings Corp. (PDS) will launch the country’s first digital corporate bond in February to deepen local capital markets, the Department of Finance (DoF) said.
The issuance will use distributed ledger technology, where transactions are recorded in several sites instead of a centralized database.
Philippine Dealing and Exchange Corp. (PDEx) President and Chief Executive Officer Antonio A. Nakpil said PDS is working with a Singapore-based financial technology company to roll out the digital registry backed by the distributed ledger technology.
“The PDS is aiming to conduct an end-to-end test of the digital registry and depository with market participants by January this year and is targeting its possible live launch with an issuance of a digital bond by late February,” he said.
Mr. Nakpil said the digitalization roadmap for the corporate bond market includes the use of distributed ledger technology, which will be integrated with the PDS online platform.
The platform, or the electronic securities portal (e-SIP), was launched for the primary market last year.
The e-SIP allows the online submission of documents required for PDEx listing and Philippine Depository and Trust Corp. registry services for initial public offerings for corporate bonds.
After the Ayala Land, Inc. pilot last year, in which the company offered its four-year P10-billion bond, four more issuers have onboarded securities and client investors through the online portal.
PDS last month said it was preparing cybersecurity measures as it rolls out its online platform for the secondary market.
Finance Secretary Carlos G. Dominguez III said he supports these digitalization initiatives to deepen the country’s capital markets. But he also expressed concern about hackers.
“I’m telling you this type of digitalization is probably going to be a target for hackers and scammers, and just plain thieves,” he said.
Mr. Nakpil said the PDS is assessing the vulnerability of its systems to potential threats.
The PDS is working with the Bankers’ Association of the Philippines and National Association of Securities Broker Salesman, Inc. to use e-SIP to standardize processes for customers.
“This initiative looks to do away with a tedious process for investors to keep filling up the same forms several times when buying corporate bonds from different brokers,” DoF said. — Jenina P. Ibañez