Special Purpose Vehicles and Insolvency Reforms in the Philippines
AbstractThis paper focuses on the legal environment, particularly the insolvency system, that would influence the success of Philippine Special Purpose Vehicles (SPVs), also known as asset management companies (AMCs) in other countries. Since SPVs will have to operate under a given insolvency regime after they acquire the bad assets, existing bankruptcy procedures have an impact on SPV behavior, ex-ante. In particular, it influences the price that SPVs offer for the NPAs that, in turn, affects the banks’ willingness to sell, and thus the achievement of the government goal of banks’ bad loans clean-up. The paper discusses the features of the SPV Act, the pace of bad asset transfers to SPVs, the current rehabilitation procedures, and the proposed legal bankruptcy reforms that would affect the effectiveness of SPVs.
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Bibliographic InfoPaper provided by Philippine Institute for Development Studies in its series Discussion Papers with number DP 2005-06.
Date of creation: 2005
Date of revision:
banking reforms; asset management company (AMC); bankruptcy; insolvency; nonperforming loans (NPLs);
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Qaizar Hussain & Clas Wihlborg, 1999. "Corporate Insolvency Procedures and Bank Behavior," IMF Working Papers 99/135, International Monetary Fund.
- Clas Wihlborg & Shubhashis Gangopadhyay, 2001. "Infrastructure Requirements in the Area of Bankruptcy Law," Center for Financial Institutions Working Papers 01-09, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Per Stromberg, .
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- Per Strömberg, 2000. "Conflicts of Interest and Market Illiquidity in Bankruptcy Auctions: Theory and Tests," Journal of Finance, American Finance Association, vol. 55(6), pages 2641-2692, December.
- Lucian Arye Bebchuk, 1998. "Chapter 11," NBER Working Papers 6473, National Bureau of Economic Research, Inc.
- Thorburn, Karin S., 2000. "Bankruptcy auctions: costs, debt recovery, and firm survival," Journal of Financial Economics, Elsevier, vol. 58(3), pages 337-368, December.
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