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Special Purpose Vehicles and Insolvency Reforms in the Philippines

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  • Pasadilla, Gloria

Abstract

This 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.

Suggested Citation

  • Pasadilla, Gloria, 2005. "Special Purpose Vehicles and Insolvency Reforms in the Philippines," Discussion Papers DP 2005-06, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_2005-06
    as

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    File URL: https://www.pids.gov.ph/publication/discussion-papers/special-purpose-vehicles-and-insolvency-reforms-in-the-philippines
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    References listed on IDEAS

    as
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    3. Mario B. Lamberte, 2002. "Recent Developments in Financial and Corporate Governance in the Philippines," World Scientific Book Chapters, in: Augustine H H Tan (ed.), Monetary And Financial Management In Asia In The 21st Century, chapter 9, pages 213-228, World Scientific Publishing Co. Pte. Ltd..
    4. Klingebiel, Daniela, 2000. "The use of asset management companies in the resolution of banking crises - cross-country experience," Policy Research Working Paper Series 2284, The World Bank.
    5. 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.
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    7. Mr. Qaizar Hussain & Clas Wihlborg, 1999. "Corporate Insolvency Procedures and Bank Behavior: A Study of Selected Asian Economies," IMF Working Papers 1999/135, International Monetary Fund.
    8. Thorburn, Karin S., 2000. "Bankruptcy auctions: costs, debt recovery, and firm survival," Journal of Financial Economics, Elsevier, vol. 58(3), pages 337-368, December.
    Full references (including those not matched with items on IDEAS)

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