Greetings!

MART has grown through the years and with your help we have established ourselves as a progressive partner of various market stakeholders in the development of our capital markets. We could not have accomplished this without the continuous support of all member institutions that have provided time, effort and resources in ensuring the continued success and relevance of MART. Now that we are embarking on the monumental task of helping our nation face the global economic crisis, please allow me this opportunity to write to you about the things that MART has accomplished in recent years, and update you of MART’s future plans, projects and advocacies, where you can participate and provide your much-needed expertise.

This year, MART decided to adopt the theme “Fuelling Economic Growth Through Intelligent Investing.” We have chosen this theme because we believe that investor education is a key component in marshalling resources to fuel the Philippine economy, which is currently in the midst of global financial crisis. The BSP liked our theme so much that they’ve invited us to partner with them through their Financial Consumer Affairs Group to organize a series of forums around the country.

The board has passed a resolution to create a new committee that will ensure that our obligation to the investing public will always receive proper focus. The Financial Literacy Committee which will be chaired by the incumbent president shall ensure that current and future programs will continuously promote education of the public on the financial markets.

But we have always placed education as one of the top items in our agenda every year. We have provided a program of seminars with the aim of professional development for our traders. We have organized seminars on Market Reading, Fixed Income Valuation, Asset Liability Management, Risk Management, Interest Rate and Credit Derivatives and High Performance Bank Selling. We have also arranged forums aimed at helping member institutions adopt with new regulations, such as the SEC Salesman review and the Basel II seminar. We have likewise attempted to improve public consciousness of the money market by arranging forums and seminars on a variety of topics aimed at journalists, students and NGOs.

This year, the Education Committee, under Ricky Cebrero (EWBC) started its series of professional development seminars with a Fixed Income and IRS seminar last April 17 and will embark with its joint project with the BSP and SEC in the coming months.

We’ve also provided opportunities for our members to interact with the BSP Governor, National Treasurer, SEC Chairman, BIR Commissioner, key lawmakers and prominent economists during our general assemblies, allowing us the chance to discuss with them the most relevant issues of the day. This year during our First General Assembly and Induction Ceremony for the newly elected MART Board last April 2 at the Intercontinental Manila. Our guest speaker, BSP Deputy Governor Nesting Espenilla, outlined the reforms being undertaken to improve local benchmarks.

MART has always been on the forefront of market development. This year we have finished and secured board approvals for our Code of Ethics. More than a year ago, BSP Gov. Amando Tetangco Jr. commissioned MART to prepare a Code of Ethics. The objective of the Code is to provide a reference for banks, brokerage firms and other financial institutions in setting high standards of professional excellence and codes of conduct for market practitioners. This is anchored on the belief that high ethical standards are critical in maintaining the public’s trust in the financial markets. The BSP will also be adopting this code as basis for bank supervision and as such the code will be circularized shortly.

Under the leadership of Joan Policarpio (DB) and the Professional Markets Committee, MART has presented the BSP with our Code. It provides behavioural guidelines covering Professionalism, Integrity of Capital Markets, Duties to Clients, Conflicts of Interest and Duties to Market Counter-parties. Copies of the Code of Ethics will be e-mailed to all member financial institutions and a copy will be made available on our MART website.

In line with the Code of Ethics, we will soon be embarking on an ambitious project with ACI and other fellow professional associations in a couple of weeks. We plan to create and update the trading conventions and standards of practice manuals for all treasury products. We envision this set of manuals to resolve certain trading issues, but more importantly create a more synergistic and efficient capital market. We plan to include the newly updated Inter-bank Call Loan (IBCL) Trading Conventions that was finished late last year.

We also have successfully lobbied to the BSP the rationalization and reduction of required reports for submission, hence, reducing the workload of our backroom personnel. This project was headed by Joric Nazario (PVB).

We have also been instrumental in the development of the Intraday Lending Facility (ILF) of the BSP. The ILF is a liquidity facility that allows financial institutions to cover temporary short positions to allow a much smoother settlement of trades. Currently the MART through its operations committee is working on further enhancements on the facility with the BSP.

We also have submitted a product kit on MART Forwards to the BSP. The product is aimed to enable financial institutions to engage in forward rate agreement transactions with each other to better manage the risk of their portfolios.

On other fronts, MART has been busy with several other issues. We are very active in the preparation of the Implementing Rules and Regulations of the PERA Law. We are currently engaged in talks with the Capital Markets Development Council (CMDC), BSP and PDEx on what benchmarks to use in marking-to-market fixed-income securities, and improvements in the current benchmarks. We are also in discussions with BSP and SEC with regards organized markets for peso interest rate swaps.

Meanwhile, on the lighter side of things, the Fellowship and Convention Committee has continually provided us the opportunities to unwind and create and renew friendships. We have organized several Trader Nights and Christmas parties. We have also organized sports activities ranging from badminton, bowling, billiards and golf. Now under the leadership of Toto Hilado (RCBC) we have expanded to electronic gaming by organizing the first Counter-Strike tournament at the b-Connected Internet café at Greenbelt 4 last April 15. It was a widely participated and well-received event that saw an elite BSP team eliminate all challengers to win the tournament. The Fellowship Committee has also lined up the MART Golf Tournament on May 23 and the Interfinancial Golf Fellowship on June 6.

We also exercised our social responsibility by donating time and resources to such worthy charities as Boys Town, the Philippine General Hospital and Gawad Kalinga.

Meanwhile our membership continues to grow. This year we welcomed four (4) new members, namely: Philippine Health Insurance Corporation, Producers Rural Banking Corporation, Tradition Financial Services Phils., Inc. and Vicsal Investment, Inc., increasing our membership to sixty-four (64).

Finally, we bade farewell to some long-time directors, namely, Lulu Cinco (AB Capital), Roland Avante (Chinatrust) and Paul Evora (BDO) and welcomed new blood to the MART Board with their respective replacements, Francis Varela, Oliver Jimeno and Coco Martin.

I am happy to report that MART has remained true to its vision and mission and continues to be at the forefront in helping bring our financial markets to the next level. Your association remains committed in ensuring its relevance to its members and will be there to protect the interests of the Philippine Financial Markets and the public that it serves. I look forward to your most valuable support of MART as we progress into the future.

Thank you.

Yours truly,

Paul Favila

MART President