May 26, 2009

The Philippines is planning to set up a commodity exchange within the next two years, allowing trading of major crops from the country such as rice and corn, the Philippine Stock Exchange (PSE) said Monday (May 25).

 

The local bourse is expected to soon sign a memorandum of agreement with the agriculture department to finalize the operational and trading requirements and work out regulations for the exchange, said Francisco Lim, PSE's president.

 

The PSE is in the process of acquiring a trading system that will enable trading of commodities, Lim said.

 

"We plan to create a separate commodity exchange which can be owned by various stakeholders like PSE," Lim told reporters.

 

Agriculture Secretary Arthur Yap said the commodities that will be traded in the exchange include rice and corn.

 

As planned, warehouses owned by state-owned National Food Authority will be used to store grains traded in the exchange, Yap said.

 

"What is critical is to have the physical backbone that would ensure the transfer of physical and maintain the integrity of the papers that will be traded," he said.

 

The Manila International Futures Commodity Exchange was active from 1985 to 1996. It was closed down by government regulators amid allegations of price rigging.