Stock Market

The only operating stock exchange in the country is the Philippine Stock Exchange, Inc. (“PSE” or the “Exchange”). The PSE is a private organization created to provide and maintain a fair, efficient, transparent and orderly market for the purchase and sale of stocks and other securities. It was formed out of the merger of the country's two former stock exchanges, the Manila Stock Exchange (MSE), established on 8 August 1927, and the Makati Stock Exchange (MkSE), formed on 27 May 1963. The two bourses were considered as separate entities for nearly 30 years, despite basically trading the same listed issues, until they merged into the present-day PSE on 23 December 1992 to achieve uniform pricing of stocks and eliminate arbitrage transactions.

Initially established as a non-stock, member-governed organization, the PSE has since then reorganized and transformed into a shareholder-based, revenue-generating corporation following the enactment of the Securities Regulation Code of 2000. Along with this rebirth came the separation of the Exchange's ownership and trading rights, which opened the doors for the entry of new market participants. On 15 December 2003, PSE shares were listed by way of introduction.

At present, the PSE still maintains two trading floors (one at the PSE Centre in Pasig City and another at the PSE Plaza in Makati City), which are linked electronically to enable brokers and traders to execute orders and clear transactions within the day. Market participants trade daily - from 9:30 a.m. to 12:10 p.m. - except Saturdays, Sundays, legal holidays and days when the BSP Clearing Office is closed. The Philippine Central Depository, established in March 1995, provides the securities settlement system for both debt and equity instruments of the PSE through its computerized book-entry-settlement system. Meanwhile, the Securities Clearing Corporation of the Philippines is the clearing and settlement agency for depository eligible trades executed in the Exchange and the administrator of the Clearing and Trade Guaranty Fund.

Companies are listed at the PSE on the First Board, the Second Board or the Small and Medium Enterprises Board. Listed issues are then classified into one of six sectors: Financials, Holding Firms, Industrial, Mining and Oil, Property, and the Services Sector.¹ The main barometer of stock price movements is measured by the PSE Index (PSEi).

For more information on the stock exchange, please visit the PSE website at www.pse.com.ph.

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¹ On 2 January 2006, a new classification system went into effect at the PSE, which based classification on the listed company's main source of revenue. Before, the shares listed at the PSE were classified on the basis of their sector industry classification when the companies filed their articles of incorporation.