House Approves Securitization Act.(Main News)

Article excerpt

Byline: ROD L. VILLA

House Speaker Jose de Venecia yesterday said he expects about $5 billion in new investments to boost the Philippine economy with the approval of the proposed Securitization Act as a companion to the special Purpose Assets Vehicles Act of 2002 earlier passed by the House of Representatives.

House Bill 4453, the Securitization Act, was approved on second reading by the chamber Monday night as the House moved to pass major economic measures that De Venecia said will strengthen the economy which posted a modest gain over the past few months.

"This measure will certainly promote and guide the development of the country's capital market and create a favorable market environment for a wide range of asset-backed securities," he said.

The House of Representatives had earlier passed its twin measure, the "Special Purpose Asset Vehicles Act of 2002" (SPAVs), HB 3236, designed to mobilize more than P267 billion in non-performing loans (NPLs) held by the commercial banking system and P140-billion more in foreclosed real estate assets.

Of the expected new investments, $1-billion has already been committed by New York's Lehman Brothers. The speaker has also initiated talks with another multi-national investment institution for another $1-billion investment inflow expected before the yearend.

De Venecia is the principal author of the two measures that he said will give a tremendous boost to the economy by inducing new investments and providing a solution to the problem of NPLs which have stymied the Philippine economic recovery.

"The cost of doing business in the country has become become artificially high because bank resources are tied up in unproductive financial holdings while real estate assets lie idle," De Venecia said.

The other principal authors of the Securitization Act included Majority Leader Neptali Gonzales II, and Representatives Oscar Moreno, Robert Ace Barbers, Jimmy Lopez, Eduardo Zialcita, Francis Escudero, Teodoro Locsin, and Del De Guzman. …