For one, there is a need for some changes in exchange governance, World Bank vice president for East Asia and Pacific region Jemal-ud-din Kassum said, there is also a need to strengthen the exchange’s self-regulating capacity, he added.
Kassum said, "the Securities and Exchange Commission should be supported to strengthen its institutional capacity and secure its full independence. Improvements in reporting and disclosure rules in the stock exchange are also critical, he added.
Another factor that is crucial to the development of the local stock market is the strengthening of the accounting and auditing of public companies.
With these measures, he said the securities markets in the Philippines could potentially serve as the focal point for increasing equity investments.
He said there is also a need for good corporate governance to seize the opportunities that come about as a result of globalization.
"Improved corporate governance ensures that the rights of investors are appropriately protected and their investment decisions are based on sound and timely data," he said.
The World Bank official said the authorities should be responsible for putting in place the legal, financial and related frameworks that provide the foundation for good corporate governance.
"Individual companies also have a responsibility to improve the way they are governed. It means adopting standards of fairness, openness, and efficiency that would make them an attractive place for outsiders-foreign or domestic — to put their capital," he said.
In this regard, the World Bank Group has helped create the Institute of Corporate Directors in the Philippines, which aims to make directors aware of their responsibilities as board members. "The institute would work closely with other such institutes in the region," he said.
He also underscored the importance of the role of the technology in globalization. "E-commerce has emerged as an important strategic issue. Between 1995 and 1999, E-commerce revenues had been growing globally at more than 95 percent per annum, he said.
Some estimates, he said, suggest that by year 2004, global E-commerce revenues will exceed $1 trillion.
Recognizing these facts, he said the International Finance Corp., the investment arm WB recommends of the World Bank group made its first investment in an Internet company in the Philippines, Plantersbanke-Commerce, a venture that provides small and medium enterprises low cost and easy access to the Internet and e-Commerce.
"The Philippines is well placed and has the potential to seize this business opportunity," he said.