Although the MSE and the MKSE were operating as separate entities, the two exchanges were basically trading the same listed issues. In order to develop a more efficient capital market, members of the MSE and the MKSE organized themselves into the Philippine Stock Exchange, and agreed on a functional unification of the two trading floors. On March 25, 1994, one virtual exchange was achieved through the successful computer link-up of the two existing trading floors -- the principal trading floor located at the Tektite Towers, dubbed as the Philippine Stock Exchange Centre, and the extension trading floor in Ayala, Makati City. The state-of-the-art principal trading floor at the Philippine Stock Exchange Centre was put on line on September 5, 1994.

The unification of MSE and MKSE into the PSE has broadened the horizon of the stock market industry in the Philippines. At the same time, it has done away with the confusion arising from two prices for the same issue. Unification has also spawned innovations, such as a fully automated trading system; provision of a central clearing and depository system for speedy resolution of disputes; and thorough and accurate disclosures of corporate news to ensure an even playing field. Also included in PSE's program is the broadening and upgrading of the stock market through an array of marketing programs designed to educate the public on the stock market business, and to attract an increasing number of investors into the capital market.

As of March 15, 2000, the Philippine Stock Exchange had a total of 224 listed companies. Stocks listed in the PSE are classified into five sectors namely banks and financial service; commercial and industrial; property; mining; and oil. Companies engaged in banking, investments and finance are under the banks and financial service sector. The commercial and industrial sector includes holdings firms, as well as those in telecommunications; food, beverage and tobacco; construction; power and energy; transportation services; manufacturing; distribution and trading; hotel, recreation and other services. Companies engaged in land and property development are classified under the property sector. The oil sector includes firms involved in oil exploration, extraction, and production.

A Board of Governors -- headed by a chairman and composed of 14 broker-nominees, and one non-broker nominee who is appointed as President/Chief Executive Officer -- oversees and provides direction, control, and guidance to the operations of the PSE. The Board, elected annually for a term of one year, is vested with the powers necessary to govern the Exchange, and the regulation of the business conduct of its members.

Headed by the President/CEO, the PSE's organizational structure covers seven departments, namely, Finance and Corporate Development; Listing; Membership; Compliance and Surveillance; Information Technology; Research and Human Resource; and Administration. The first three departments report directly to the Office of the President/CEO, while the other departments are directly under the Chief Operating Officer. The PSE is being assisted in its operations by three offices: the PSE Ayala Centre; Public Relations and Market Development Office; and the Clearing and Settlement Office.

As the capital market continues to expand, it became necessary for the Philippine Stock Exchange to provide investors with market indicators that would be more reflective of the current market trends. On November 15, 1996, a modification was made on the Composite Index (Phisix) as well as its sub-indices. The new Phisix is represented by 15 industries as compared to the 13 industries previously covered, and accounts for more than 70% of the total market capitalization. Also, two new indices were introduced: the Banking and Financial Services Index to capture the performance of this flourishing business sector, and the All Shares Index which includes all listed issues except those which are suspended, bonds, preferred, and warrants.

On December 16, 1997, the PSE was granted a temporary Self-Regulatory Organization (SRO) status by the Securities and Exchange Commission (SEC). This means that the PSE can adopt a code of conduct that will ensure a high standard of trade. With an SRO status, the PSE is equipped with its own regulatory framework and ethical standards to supervise its members. The temporary SRO status given to the PSE may be upgraded to a permanent status if the PSE is able to adhere to the conditions set by the SEC.

To further provide quality service to PSE member-brokers as well as investors, the Philippine Central Depository (PCD) and the Security Clearing Corporation of the Philippines (SCCP) have been established. On January 9, 1997, the PCD officially started its operations beginning with the stock certificates of wholly Filipino-owned Jollibee Foods Corporation. The PCD serves as a central depository of stock certificates, while the SCCP allows easier clearing and settlement of payments. In addition, the PSE is planning to fully automate the backroom operations of its member broker firms to attain its objective of scripless trading.

For more information about the Philippine stock market in general or the Exchange in particular, contact: