Innovations in Corporate Securities in the Philippines: 1987-August 1992

Abstract

The paper presents innovations in long term corporate securities in the Philippines over the period 1987-August 1992.  While innovation may simply have been a response to the difficult market conditions that prevailed in the latter part of that period, they do demonstrate a receptivity to innovate and this augurs well for further development of the market.  For investors innovation imply a wider array of choice to improve risk-return profiles of their portfolios.  For issuers it opens up new possibilities for generating long term funds and reducing capital cost.  However, innovation is not without risk for both investor and issuer.  Investors will have to be more sophisticated in evaluating new securities.  Issuers are not guaranteed that innovative issues will always succeed.