SEC to plug loopholes in Corporation Code

MANILA, Philippines - The Securities and Exchange Commission (SEC) is seeking to plug loopholes in the Corporation Code in line with efforts to promote good corporate governance.

SEC chairperson Teresita Herbosa said the agency wants to weed out delinquent firms and shorten the maximum life of companies from the maximum of 50 years to only 25 years. 

Herbosa said the agency also aims to put more focus on revocation to make sure only competent corporations operate. “It would be bad for the business community if corporations whose registration license had already been revoked would continue to operate,” she said. 

There are around 700,000 firms registered with the SEC but only about half are operating and actively complying with the regulatory requirements.

Last year, the SEC chalked in record revenues of P1.4 billion or nearly twice the agency’s target of P800 million. 

Herbosa said bulk or 85 percent of the agency’s revenues came from filing fees from business registration, initial public offering and other share sale transactions. The remaining 15 percent of the collections came from penalties imposed on corporations.

She noted that business registrations have dramatically risen in the last three years or after the currency crisis that erupted in 2008.

Herbosa said she is optimistic that the SEC will continue to post higher revenues this year especially with the expected influx of initial public offerings (IPPs).

At least three corporations have so far filed their IPO applications this year. These are East West Banking Corp., GT Capital Holdings and Calata Corp. I-Pay Commerce Ventures Inc. has also filed its application to list by way of introduction along with Lopez-owned Rockwell Land.