Lombard loans in Philippines.
Private, securities-backed credit against Philippines-listed shares — pledged, not sold, with ownership retained.
A Lombard loan against Philippines-listed shares is credit secured by a pledge of equity listed on the PSE. The holder pledges the shares as collateral, draws cash against a fraction of their market value, keeps beneficial ownership and dividends subject to structuring, and recovers the position in full on repayment. It is a loan against shares rather than a sale of them — the Geneva private-banking form of what is elsewhere called a share-backed loan.
- Lombard loans are arranged against shares listed on the PSE (PSE).
- The pledge is not a sale: ownership, dividends, and the upside stay with the holder.
- Loan-to-value is calibrated to the specific position, funded in PHP or cross-currency.
- Structured under the SEC (PH) regime, with disclosure from 5%.
Eligible collateral and venues
Lombard Financing arranges facilities against equity listed on the principal Philippines venue: Philippine Stock Exchange (PSE). Eligibility at the position level turns on the liquidity and free float of the specific line, its volatility, and the size of the holding relative to its typical traded volume — the same variables that drive the loan-to-value.
Regulator and disclosure
Shares listed in Philippines are regulated by Securities and Exchange Commission (Philippines) (SEC (PH)). Substantial-shareholding disclosure is triggered from 5%, and a pledge over a large line is structured with that reporting regime in view so that the transaction remains discreet and compliant. Where a holding sits near a control or takeover threshold, the structure is arranged to avoid disturbing the position.
Funding, custody, and structuring
Facilities are typically arranged for a tenor of twelve to thirty-six months, funded in PHP or in another currency on a cross-currency basis. Throughout the facility the pledged shares are held by a qualified custodian under bankruptcy-remote arrangements, so the security is clean and the holder’s ownership is preserved. Non-recourse, limited-recourse, and full-recourse structures are available, and the choice interacts with the loan-to-value and the pricing. One distinction is worth drawing at the outset: this is not a stock loan in the securities-lending sense, where title passes to a borrower who may on-lend or short the line. Here the shares are pledged and remain the holder’s throughout, as the comparison of Lombard, margin, and stock-loan structures sets out.
| Listing venue(s) | Philippine Stock Exchange (PSE) |
|---|---|
| Regulator | Securities and Exchange Commission (Philippines) (SEC (PH)) |
| Currency | PHP (cross-currency available) |
| Disclosure threshold | From 5% substantial-holding disclosure |
| Principal indices | PSEi (PSE Composite Index) |
| Indicative tenor | 12–36 months, renewable by agreement |
| Recourse | Non-recourse / limited-recourse / full-recourse |
Detail by listing venue
Each venue has a page of its own, setting out how securities-backed credit is arranged against shares admitted there — the disclosure regime, the settlement and custody chain, the eligible segments, and the currency in which a loan against shares is normally drawn.
- Lombard loans against PSE-listed shares — Philippine Stock Exchange, Manila (Bonifacio Global City). SEC (PH)-regulated, with disclosure from 5%; indices PSEi (PSE Composite Index).
Considering a Lombard loan against a Philippines-listed position?
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On this market, specifically.
The market and its listed universe
The Philippine Stock Exchange is the country’s only equities venue. The PSEi carries thirty constituents, sitting above the All Shares index and six sector indices — financials, industrial, holding firms, property, services, and mining and oil — a taxonomy that reflects how much of the market is organised around diversified holding companies rather than single-business issuers. Beneath the Main Board sit the SME Board and a dollar-denominated securities board. Turnover is thin relative to capitalisation and heavily concentrated in the index names. Free float is the binding constraint: many issuers are controlled by a family holding company that floated only a modest public tranche, and the exchange’s minimum public ownership rule sets a higher bar for new listings than the legacy standard applied to older ones.
Who borrows against listed shares here
The register is dominated by a handful of family conglomerates, several of them Chinese-Filipino houses built after the war, which hold their banking, property, power, retail and infrastructure businesses through listed holding companies and rarely reduce below control. Government pension institutions — the Government Service Insurance System and the Social Security System — run substantial domestic equity portfolios and are long-horizon holders by mandate. A large overseas Filipino population adds a diaspora layer holding through local brokers and family arrangements. The families are the natural users of borrowing against shares: capital is wanted for a land assembly, a power or toll-road commitment or an estate settlement, and in a market where a few names carry the index, a visible sell-down invites precisely the commentary they are trying to avoid.
Disclosure and regulation
Philippine-listed shares fall under the Securities and Exchange Commission and the Securities Regulation Code. Beneficial ownership above five per cent is reportable, with further reports as the position changes, and the mandatory tender-offer rules engage at the thirty-five per cent level and again where an acquisition would deliver majority control — thresholds the Commission has amended more than once, so the current text is worth reading rather than assuming. The constitutional and statutory foreign-equity ceilings are the market’s real distinguishing feature: they cap foreign participation across whole sectors and, following the Supreme Court’s Gamboa rulings and the Commission’s implementing circular, are tested against each class of shares rather than against total capital. That test governs who may lawfully come to hold pledged securities on an enforcement.
The legal form of the security
The Philippines replaced its old pledge and chattel-mortgage regime with the Personal Property Security Act, Republic Act No. 11057 of 2018, which introduced a unitary security interest over movables and a notice-based Personal Property Security Registry maintained by the Land Registration Authority. Under that Act a security interest in investment property may be perfected by registration or by control, and control-based perfection generally carries the stronger priority — which is exactly why the custody route chosen for pledged securities matters so much here. The Act also provides for expedited extrajudicial enforcement, including disposition after notice, rather than forcing a financier into full court proceedings. How it interacts with residual Civil Code pledge doctrine, and with a rehabilitation filing, is worth settling with Philippine counsel.
Custody and how security is taken
Two forms of holding coexist, which is unusual by regional standards. Shares can sit in certificated form on the books of the issuer’s stock transfer agent, or scripless in the Philippine Depository & Trust Corporation, the central depository, with clearing through the Securities Clearing Corporation of the Philippines. A certificate must be lodged into the depository through a participant before the shares can be traded on the exchange, and can be uplifted back out again — a mechanic with no counterpart in fully dematerialised markets and one that materially affects timing. The depository also operates a name-on-central-depository facility allowing an investor to appear in its own name rather than only through a participant. For a financier the first question is simply where the shares presently sit.
Currency and cross-border considerations
The peso is convertible and floats, but access to the banking system for outward remittance turns on registration. Under the Bangko Sentral ng Pilipinas foreign-exchange rules, inward foreign investment is registered with the central bank, and that registration is what entitles the investor to buy foreign currency from a bank in order to repatriate capital and remit dividends. An unregistered investment is not unlawful, but proceeds must then be converted outside the banking system, which is a materially different exercise. Foreign borrowing by residents is separately subject to central-bank approval or registration where servicing will draw on banking-system foreign exchange. For a cross-border loan against listed shares, both registrations belong in the structuring discussion rather than the repayment one.
Tax questions to put to your adviser
Ask a Philippine adviser five things. What is the current rate of the stock transaction tax on sales of listed shares through the exchange, which recent capital-markets legislation reduced? Does documentary stamp tax attach to a pledge, to a deed of transfer into a financier’s nominee, or to the loan documents themselves — the Philippines applies DST widely and it is easily overlooked. How are dividends to a non-resident taxed, and what does a treaty claim or the tax-sparing rate require by way of ruling or confirmation? Is interest paid to an offshore lender subject to final withholding? And would an enforcement sale be treated for tax purposes as a disposal by the borrower or by the financier?
General information only — not tax advice. Treatment turns on your own circumstances and residence, and on law that changes.
An illustrative example
Consider a founding family’s block in a PSEi holding company — the listed vehicle through which a Philippine group holds its banking, property, power and retail interests. The block is the family’s identity as much as its balance sheet, and a sale would be read across the whole group. Borrowing against the shares leaves the holding and the board seats untouched, keeps dividends flowing to the family, and releases cash for a land assembly, an infrastructure commitment or an estate settlement. Where the underlying businesses sit in sectors carrying foreign-equity ceilings, the enforcement route is mapped before anything is drawn, because who may lawfully receive the shares is a constitutional question rather than a commercial one. On repayment the security is released.
Illustrative only — not an offer, a quotation, or a commitment to lend.