July 24, 2026 l The Manila Times
When people hear the term “capital markets,” they often picture the stock exchange. However, it means more than just securities traders.
Every new factory, school, hospital, renewable energy project, housing development, or tech startup starts with a key necessity: securing long-term capital.
Capital markets play a vital role in the economy by converting savings into productive investments. They link individuals and institutions with the capital needed for business investments. When functioning efficiently, this process promotes business growth, job creation, faster innovation, and increased economic competitiveness.
In a developing nation like the Philippines, the role of capital markets is crucial. Achieving steady, inclusive growth depends on significant investments across sectors such as infrastructure, education, healthcare, housing, energy, manufacturing, agriculture, and digital advancement.
Government funding alone cannot meet these needs, so a dynamic capital market is essential to allow private savings to fill the funding gap.
The advantages go far beyond companies trying to raise funds. Robust capital markets offer Filipinos increased chances to grow their long-term wealth. They also give investors a wider array of options to diversify their savings and engage in the growth of Philippine businesses.
I am reminded of the quote of the World Bank’s former chief economist, Joseph Stiglitz, when he said: “The financial system is the brain of the economy.”
A more developed capital market enhances our economy’s resilience. Companies that can tap into various long-term financing options are in a stronger position to invest. Decreasing dependence on traditional bank loans fosters a more balanced financial system and provides businesses with increased flexibility to focus on long-term growth.
Achieving these benefits depends on a regulatory environment that fosters investment and trust. Investors must have confidence that markets are fair, disclosures are reliable, and regulations are enforced consistently.
Meanwhile, businesses require smooth channels for capital access, along with strong accountability and investor protections.
Reforms
It is encouraging to see the Securities and Exchange Commission, under Chairman Francis Lim, pursuing reforms to deepen and modernize the Philippine capital markets.
Initiatives to streamline the public offering process, improve access to financing, strengthen investor protection, and enhance regulatory efficiency recognize that capital formation and market integrity are mutually reinforcing. The stronger our markets become, the better positioned our enterprises will be to finance growth and compete regionally.
The private sector plays an equally important role. Recently, the Capital Market Development Foundation Inc. (CMDFI) paid a courtesy call on Lim to express our support for the SEC’s reform agenda.
CMDFI, whose leadership includes many former Finex presidents and seasoned capital market practitioners, reaffirmed the private sector’s commitment to work with the SEC to strengthen the country’s capital markets.
Representatives from FINEX and the Institute of Corporate Directors have likewise participated in these discussions, reflecting a shared recognition that building vibrant capital markets requires collaboration among regulators, issuers, investors, and market intermediaries.
One area where this collaboration can be further strengthened is revitalizing the Capital Markets Development Council (CMDC). The CMDC has long served as an important venue for bringing together government agencies and private sector stakeholders to coordinate initiatives that promote capital market development.
More importantly, it provides an institutional mechanism for implementing the Philippine Capital Market Development Blueprint, monitoring progress against its objectives, identifying implementation gaps, and ensuring that reform efforts remain aligned over the long term.
Revitalizing the council would reinforce the continuity and accountability needed to translate well-crafted policies into measurable outcomes.
Developing strong capital markets is not the responsibility of any single institution. It requires sustained collaboration among regulators, policymakers, the business community, professional organizations, and investors.
FINEX and CMDFI stand ready to support the SEC and other stakeholders in advancing reforms that promote responsible capital formation, strengthen governance, broaden investor participation, and make the Philippines a more competitive destination for long-term investment.
Strong capital markets are not an end in themselves. They enable enterprise, innovation, and opportunity. By continuing to strengthen our market institutions and working together toward a common vision, we invest not only in stronger financial markets but also in a stronger, more inclusive Philippine economy.
***The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX. For comments, email eaquahiansen@phinma.com.ph. Photo is from Pinterest.