Hedging activity growing in the Philippines

While authorities in the West increase derivatives regulation, the Bangko Sentral ng Pilipinas has liberalised rules governing both hedging and yield enhancement markets in the past few years. Despite the challenges in expanding penetration in a market capped by a double-B sovereign rating, some dealers say the Philippines is one of the fastest growing markets in Asia Pacific. Joti Mangat reports

Derivatives dealers seeking new markets in emerging Asia in the wake of the global financial crisis count regulatory restrictions, headline risk and poor product awareness as typical barriers to entry. This has not been the case in the Philippines which, since 2008, has taken a series of progressive steps to liberalise the derivatives market and encourage greater usage among dealers and end-users. During the past two years, the Bangko Sentral ng Pilipinas (BSP) has replaced its old dealer