Chapter 4

The researchers conducted a bond market liquidity survey to assess liquidity conditions in
LCY bond markets in the Philippines. The survey aims to provide an evaluation of the state of
liquidity for of the Philippine Bond Market and identify potential areas for development. The
survey is conducted through meeting interviews, phone interviews and e-mail correspondence with
bond market participants. Market participants were asked about their perceptions of the current
state of a number of structural factors that are known to affect bond market liquidity particularly
the current legal and regulatory constraints.

Respondents were asked to rate their respective markets on a scale of 1-4 for each structural
issue. A rating of 4 indicates that the respective bond market is considered significantly advanced
or developed with regard to a particular issue. One caveat is that the ratings are based on participant
perceptions and may not necessarily reflect the actual development state of the bond market.
Responses were averaged for both individual markets. Government bonds include obligations of
the central government, local governments, and the central bank. Corporates comprise both public
and private companies, including financial institutions. Financial institutions comprise both private
and public sector banks, and other financial institutions. Bonds are defined as long-term bonds and
notes, Treasury bills, commercial paper, and other short-term notes.

The results of the survey are as follows:

(Interpretation)
(Interpretation)