Brief Introduction

The Philippine economy has undergone a momentum of development that has surpassed the expectations of economists and observers, largely due to two factors:  1)  the appreciation of the Philippine peso relative to the U.S. dollar, and,  2) the increase of foreign exchange reserves due to the dollar repatriation of Overseas Foreign Workers, and increase of direct foreign investments.

Despite the increase of economic activity, the largely poor section of the population still remains poor, and living under minimum wage as well as substandard living conditions.  The trickle-down effect has been yet been realized due to a number of factors such as skewed development policies, misappropriation of funds, or graft and corruption, etc.

In order to provide a platforn by which development can seep through the majority of the Filipinos, we are proposing mechanisms for the redistribution of wealth in the financial markets.

From time to time, we hear of stories of financial frauds attributed by multi-level marketing, and other schemes to defraud the financially-capable segment of the population.  This market segment can be utilized to generate the first round of financial package aimed at utilizing unused cash and assets for productive investments.

Indeed, the creation of a financial structure geared towards the redistribution of financial resources such as savings (largely invested in financial schemes and property development ) can be tapped to generate new wealth in industries which are undergoing rapid expansion.

The creation of a new financial system should be undertaken which shall encompass an efficient integration in the world financial markets as well as domestic markets such as bonds, stocks, currencies, and other negotiable instruments which are actively traded in the open market.

The present Philippine Stock Exchange is only suited for institutional investors as well as well-entrenched investors who have been in the stock market since its inception with capitalization ranging more than Ten Million pesos.

Clearly, small stock investors are disenfranchised and have to suffer from low returns from bank savings deposit to conservative property market investments, and worst of all, victimized by financial schemes aimed at defrauding them.

In the meantime, majority of small and medium enterprises lack the capital for expansion and with difficulty in obtaining bank financing for lack of collateral, and other factors, the opportunity to expand is lost.  The collective of small and medium enterprises is a major employer in the economy, and the support given by the government is not sufficient for them to expand.

Meanwhile, in the insurance industry,  policy holders are having a hard time collecting on their policies from insurers defaulting on their obligations.  Some insurers have declared bankruptcy after collecting premiums from the clients,  and with the lack of efficient regulatory framework, and conflict of interests, the same insurers would create new insurance companies, and victimize again their clients.

Indeed, it is high time to reform the financial architecture of the Philippines in order to strenghten the economy and the middle class, and uplift the poor and underprivileged from its current predicament.