Based on preliminary data from the Securities and Exchange Commission, the aggregate amount of authorized capital in new domestic corporations registered last year plunged 20 percent to P88.3 billion, sustaining a downtrend since the Asiawide financial crisis truck in 1997.
In 1996, new domestic stock corporations tallied P267.6 billion in combined capital base, sliding six percent to P252.3 billion in 1997 with the onset of the financial turmoil. In 1998, the figure dropped by a substantial 47 percent to P133.4 billion and slid 17 percent further to P110.7 billion in 1999, the first full year of the Estrada administration.
The same trend was reflected in terms of the companies’ total subscribed and paid-up capital, with subscriptions falling 29 percent to P30.1 billion and paid-in equity decreasing 26 percent to P19.3 billion last year.
The number of new registrants also dwindled, although at a slower rate than the capital lag. In 2000, a total of 11,832 new companies were formed, only eight percent less than the previous year. Of these corporations, almost 80 percent were wholly-owned by Filipinos and only 20 percent have foreign equity components.
The slowdown in capital infusion was due mainly to the lower contribution by the local businessmen, who accounted for 78 percent of aggregate equity subscriptions, despite a 19 percent upswing in foreign equity commitments last year.
Of the P30.1 billion in total subscribed capital, or the amount which the stockholders have committed to infuse into the company, the Filipinos contributed P23.4 billion, 37 percent down from the previous year. Foreigners, on the other hand, finally picked up on the other commitments with a 19-percent increase in subscribed capital to a combined amount of P6.7 billion last year.