Tax Boss Who Took On Pacquiao Chills Asian Bond Market
Philippine inland revenue boss Kim Henares is taking her four-year fight against tax evasion to the capital markets, slowing record corporate bond sales.
Henares issued a ruling in January requiring companies to list the names of all investors receiving dividends or coupon payments. The directive, which came to the fore this quarter as it was implemented more strictly, is causing some investors to avoid buying company debt.
“Some large investors have moved funds out of the country and stopped investing in fixed income and equity capital market offers,” Eduardo Francisco, president of BDO Capital & Investment Corp.
Philippine corporate debt issuance has already surpassed the previous record of $4 billion in 2012 as companies rushed to raise money before the central bank increased borrowing costs.
The regulation seeks to strengthen a 2012 ruling that requires issuers of stocks and bonds to deduct and send directly to the government the taxes imposed on the dividends and coupons paid to investors.
Source: bloomberg
