Philippine Stock Exchange to allow short selling of stocks

Philippine Stock Exchange Inc. will allow short selling of stocks once it secures approvals from the local Securities and Exchange Commission and the tax bureau, Bloomberg News reported Feb. 5, citing President Ramon Monzon.

Monzon noted that regulatory consent for the use of offshore collaterals as well as the template for a global master lending agreement are holding back the launch of its short-selling product.

Short selling on the Philippine bourse will be limited to stocks in the benchmark index and will be capped at 10% of their outstanding shares, according to Monzon. No changes or adjustments are being considered for existing short-selling rules, which he believes are "adequate, reasonable and conservative."

Discussions regarding short selling in the Philippines come amid the GameStop Corp. incident. Monzon said the chances of similar short squeezes happening locally "is quite small, if not nil."