Second, a robust domestic capital market complements the banking system in financial intermediation and can even relieve pressure especially during times of crises by providing alternative means of financing to the economy. Third, the banking system has greater flexibility in managing and re-distributing its risks via the capital market particularly through securitization and hedging.
An even more basic reason is the need to improve on the current low domestic saving rate. According to comparative data from ADB as of 2003, the gross domestic saving rate in the Philippines was only 20.1% of GDP compared with Hong Kong (31.6%), Thailand (33.1%), Malaysia (42.9%) and Singapore (46.7%). Even Indonesia is slightly higher at 21.5%.