Securitization

[Tonyang]

Future flow transactions na tinatawag mula sa mga remittance, credit card receivables, airline ticket reservations, telephone calls, OWWA contributions at marami pang OFW products, may mabubuong securitized products... na pag nag-materialize, malaking promise para sa pagbuo ng mga national funds para sa mga OFW.

Ating pag-usapan ito sa TF at sana'y makabuo tayo rito ng isang working group para maghatid ng isang proposal sa ating gobyerno.

Sino sa inyo ang mga financial person o may interest na pag-aralan ang mga creative investment bank instrument na ganito para maiangat ang ating bayan?

Tulad ng palagi nating sinasabi... wala na tayong pagasa. I think and believe... nawawalan tayo ng pagasa kasi di natin tinututukan ang pag-aaral ng mga bagong pamamaraan para magkaroon tayo ng pagasa. So nagiging immune tayo sa mga katotohanan at yes, Juan Tamad, na dahil sa immunity na ito. Also, karamihan sa atin, itinutuloy na lang ang mga dating gawi at di na nag-iisip ng ibang paraan. At kung may ibang paraan naman, nananatiling ideya dahil sa ningas cogon.

Tama ba ako Kabayan?

http://www.tpmovers.org/group2a.jpg

PS Related dito iyung idea ng cash pooling... isang paraan din ito halimbawa para mabuo ang ating Filipino School project sa Japan (http://www.tpmovers.org/filschool_japan.htm ).

[abakitba]

Asset-backed securities (ABS) are bonds backed by a pool of financial assets that cannot easily be traded in their existing form.
By pooling together a large portfolio of these illiquid assets...
they can be converted into instruments that may be offered and sold more freely in the capital markets.

In a basic securitization structure, the originator creates a pool of financial assets, such as mortgage loans...
And then sells these assets to a specially created investment vehicle that issues bonds backed by those financial assets.
These are asset-backed securities.

"Ating pag-usapan ito sa TF at sana'y makabuo tayo rito ng isang working group para maghatid ng isang proposal sa ating gobyerno."
Is this what you're talking about tonyang?

But why would you include the government... the govt that likes to steal from its people?
Example.. SSS... GSIS... retirement funds... etc.

[Tonyang]

Abaktiba, thanks for the response. It's BSP or Bangko Sentral ng Pilipinas that we should deal with regarding this.

[abakitba]

Abaktiba, thanks for the response. It's BSP or Bangko Sentral ng Pilipinas that we should deal with regarding this.

I find it remarkably sad that you would trust a government agency with your money.
Or is it naivete' on your part.
Can you name a government agency that is efficient and trustworthy?
Apologies if I sound harsh, but I don't know what else to say.
Securitization is a very complex procedure.
And I'm lost as far as what you want securitized or how you would securitize the products you mentioned.
Thank you.

[Tonyang]

If you attended the meeting with economic leaders of the country who did a roadshow here in Tokyo last Friday, you will find out that the BSP officials are very open to understand more and learn more about these future flow transactions.

It's not too far from ABS and the fact that we have a Securitization Act already in the country, we could make use of SPV to face the problem on ownership.

[abakitba]

naivete'.
Sounds so naive of a position to me...
I'm being harsh... but I do not trust the government... any government, when it comes to making money for its stockholders (citizens in the BSP's case).
If govt did a reasonable job, most Pinoys would stay in the Philippines.
I prefer investing in the commercial sector.

"that the BSP officials are very open to understand more and learn more about these future flow transactions."

Are you saying... they (BSP) still have to understand and learn about securitization?
You haven't addressed my concerns btw.
Thanks. Again, sorry but I have to be harsh... kinda like being a schoolteacher.

[abakitba]

"economic leaders of the country who did a roadshow here in Tokyo last Friday"

Appropriate description... roadshow.
My guess.... they were political leaders, possibly in charge of government bureacracies.
Not or no longer economic leaders... for example... CEO's of private industry corporations.
From what I gather, I don't think the attendees were impressed... you may have been, but I doubt it.
Please correct me if I'm wrong.
And it's a great excuse for them to visit (play tourist) Japan, di ba?
Just my opinion. I could be way off.

[Tonyang]

Abaktiba, lilihis lang ako ng konti para pag-usapan natin ang remittance-backed securitization. Una sa lahat, isa ka rin bang remitter? Kung yes, anong means ang iyong ginagamit? Bank transfer o door to door? Thanks.

[abakitba]

Bank transfers... internet banking...
BTW, how does 1700 yen per bank to bank transaction sound to you.
I'm curious? Is that too much.
Less than that for me... much less btw.
BTW, how do you plan on securitizing a remittance... it's already a liquid asset?
I'm confused.

[Tonyang]

Ok Abaktiba you're applying bank to bank transfer via internet. Good to know that your classified falls under personal wire transfer. Medyo technical ito pero I know maiintindihan mo ito.

Technically, securitization of remittances means securitization of wire transfer payments. Other various natures of a remittance is that of a credit card or cheque payments. This kind of payments fall under the category called DPR or Diversified Payment Rights. If we'll cover all these payments, it will be called securitization of DPRs. Note that these are rights but none of the obligations.

A wire transfer system is simply like this. You (sender) send JPY via a local bank (first mile) then there's a Payment Order (PO) in JPY to the target country's local bank which delivers the money in JPY or Php to your beneficiaries (last mile).

In the securitization of the DPRs, there is a need to have or form a special purpose vehice (offshore like in Cayman Islands) or SPV to incur debt secured by this future flow of funds. There will be a "true sale" of these DPRs. By this sale, it meant a sale of the bank's right, title and interest in and under the DPR to the SPV. Such a purchase to the creditors in the international market is financed by the SPV in part through incurring debt as secured by the future flows or DPRs.

On Philippine securitization in general... To date, may SPV Act na sa Pinas pero wala pang gumagawa ng securitization of remittances. Ibang ABS o asset-backed securities yes meron na. Like iyung PAL air line ticket receivables noong 1997 by JPMorgan worth $75million. Ang latest pa lang iyung BPI securtization of its NPLs (nonperforming loans). The rest, plano pa lang like iyung MRT Consortium $170million securitization of equity rental payments by HypoVereinsbank. Mayroon ding ibang mga planong ABS ang ibang bangko... Thus wala pa tayong developments tungkol sa DPR securitization na malaking potential para sa Pinas dahil ang OFW remittances natin ang malaking factor na umaangat ng ating ekonomiya. Kulang lang sa lakas ng loob at creativity ang mga authorities at mga bangko sa atin.

Anyway, hope this helps.

[abakitba]

Are you the person who had plenty of questions for the Pinoy Embassy panel recently, but the audience didn't want to hear all of your questions?

If that was you, can you describe the audience's or panel's reception to your 'securitization' question?

[abakitba]

To tonyang
No need for SPV.
The transfer is instantaneous.
Here's wikipedia's take on securitization (http://en.wikipedia.org/wiki/Securitization).
Sounds like you should become a bank president first, then steer the shareholders in the direction of securitization instead of selling it to the public.

[Tonyang]

I forgot to mention that we folks here in Japan could build our own bank (eg. OFW Japan Bank) to house these remittances and create securitized products to earn more. With a bank, we can do many things... like subsidizing our own Filipino international school in Japan and build more enterprises. Why not build trust through cash pooling of concerned folks who are easy to deal with?

[Tonyang]

Are you the person who had plenty of questions for the Pinoy Embassy panel recently, but the audience didn't want to hear all of your questions?

If that was you, can you describe the audience's or panel's reception to your 'securitization' question?




I guess I was the only one being prevented from asking more... If I was right, that was the event when the economic leaders of the country visited Japan. Abaktiba, will it help if the audience understands securitization at that point? If someone has pertinent questions on development initiatives, do you want to shut the door? Is that event the only chance to be indirectly boo-ed or put down for airing out potential and creative schemes for the country? Besides, these were only questions and not real actions to consider which must be done now instead of just plain discussion. Besides, who cares to share such technical ideas and new challenges in public? Pls refer names of bank consultants and knowledgeable ones who will do it for free. This is all about caring for the future of the country... using your own stock knowledge and capability to do something for the country.

Actually, it's not the audience who doesn't want it but it's the moderator. I had a pre-discussion with him and securitization was just one of those I would like to ask more about the authorities' creativity. Do you want to know the other questions - in fact one of them is being steered already... the idea of a bank and OWWA fund securitization.

What do you think of these ideas? Are they doable?

Now I guess this kind of questions must not be put in public because there are "better" questions to ask in public.

Now you know me... do I know you by chance? Did you ask a question too in that event?

Also, some of the bankers sent me a post-question... was I satisfied with the reply? We have economic leaders out there in the panel explaining how impossible it is which Mexico and El Salvador did successfully and the issue of ownership which I think must be another point of argument because SPV Act is already existing in the country.

Is the point of being boo-ed the important target or new hopes for the country? I could bear those many boos but not the hopeless cases of batang preso, deserving poor children because they should have a brighter future ahead. Who are willing to sacrifice for their sake? That should be a positive motivation to carry on. Right kabayan?

[Tonyang]

To tonyang
No need for SPV.
The transfer is instantaneous.
Here's wikipedia's take on securitization (http://en.wikipedia.org/wiki/Securitization).
Sounds like you should become a bank president first, then steer the shareholders in the direction of securitization instead of selling it to the public.


Abaktiba, this is a future flow transaction. You might be referring to an ABS.

What will you sell to the public when you become the bank president in a future flow securitization structure?

[abakitba]

Abaktiba, this is a future flow transaction. You might be referring to an ABS. What will you sell to the public when you become the bank president in a future flow securitization structure?
I have no idea because I will never be a bank president.
But it seems like you have a Quijotic dream.
Don't know what it is that you do, nor do I want to know.
But I would recommend that you try to excel in your field first.
As I will try in mine.
That's where my investment and my future is.
Thanks for the education, I think.

[abakitba]

I guess I was the only one being prevented from asking more... If I was right, that was the event when the economic leaders of the country visited Japan. Abaktiba, will it help if the audience understands securitization at that point? If someone has pertinent questions on development initiatives, do you want to shut the door? Is that event the only chance to be indirectly boo-ed or put down for airing out potential and creative schemes for the country? Besides, these were only questions and not real actions to consider which must be done now instead of just plain discussion. Besides, who cares to share such technical ideas and new challenges in public? Pls refer names of bank consultants and knowledgeable ones who will do it for free. This is all about caring for the future of the country... using your own stock knowledge and capability to do something for the country.

Actually, it's not the audience who doesn't want it but it's the moderator. I had a pre-discussion with him and securitization was just one of those I would like to ask more about the authorities' creativity. Do you want to know the other questions - in fact one of them is being steered already... the idea of a bank and OWWA fund securitization.

What do you think of these ideas? Are they doable?

Now I guess this kind of questions must not be put in public because there are "better" questions to ask in public.

Now you know me... do I know you by chance? Did you ask a question too in that event?
Sounds to me like you're trying to sell a car to a person who needs to buy shoes.
Selling a fighter plane to a person who's shopping for a knife.
Just the feeling I get. I could be totally off. Please have the last word.

[Tonyang]

Sounds to me like you're trying to sell a car to a person who needs to buy shoes.
Selling a fighter plane to a person who's shopping for a knife.
Just the feeling I get. I could be totally off. Please have the last word.


Abaktiba, it's alright to feel that way. That's step 2 in the learning process (affective). We should let our boxes be placed in one bigger box so we'll share other's feelings too and encourage others to join then we'll move to step 3 (psychomotor level) when we'll apply the actual learning. Are you still in the same box?

[Tonyang]

I have no idea because I will never be a bank president.
But it seems like you have a Quijotic dream.
Don't know what it is that you do, nor do I want to know.
But I would recommend that you try to excel in your field first.
As I will try in mine.
That's where my investment and my future is.
Thanks for the education, I think.

Good luck, Abaktiba. Which field should I excel first? I am into many fields right now. Is it a requirement to make a difference in the country? I guess it doesn't count... what counts the most now is perseverance - as in when you plan and start the fire, you should be responsible for it till the end.

I thought you had asked another question during that event too so I could draw a face of who Abaktiba is.

[abakitba]

I thought you had asked another question during that event too so I could draw a face of who Abaktiba is.
Thing I remember most is how late those bureaucrats were.
I think they were at least an hour late. I felt so disappointed at them.
Metaphor for our motherland?
Rest of it was a pathetic attempt/propaganda to sell the Philippines to people who wouldn't know how/where to invest if given a million dollars each. My opinion of course.