SEC: Reforms to prepare Philippines for Asean market integration

MANILA, Philippines — The Securities and Exchange Commission (SEC) said the reforms it is undertaking on corporate governance would make the country ready for market integration in the Southeast Asian region.

SEC chairman Francis Lim told reporters that corporate regulators in the region are working to connect their capital markets deeper in line with an action plan until 2030.

Lim said this is part of the reason the SEC is rolling out a series of governance reforms, some of which were brought to court by oppositors.

The reforms, Lim said, prepare local firms for eventual integration, raising them up to standard with regional peers. He added that the Philippines, as a member of the Association of Southeast Asian Nations (ASEAN), should adjust to the group, not the other way around.

Lim said an integration of capital markets would require each party to agree to a single standard on corporate governance and fair play. He added that the last thing the country wants is to be left out on the initiative.

In January, the SEC issued a memorandum circular capping the term of independent directors to nine years as a way to shore up business confidence by rejecting boardroom dominance by a few names.

Broadcasting giant GMA Network Inc., challenged it before a court, but later backed out and complied with the directive.

The SEC is raising eyebrows again in its proposal to hike minimum capital requirements for brokers to P120 million, from P100 million, to account for inflation.

Lim said governance reforms have to be applied for local firms to access opportunities overseas. He cited the case of Filipino fast food king Jollibee Foods Corp., which is eyeing to cross list in Hong Kong through its international unit.

“It is a work in progress. Cross listing whether we like it or now will happen, and therefore, what we have to do is to prepare our companies,” Lim said.

Recently, the Philippine Stock Exchange (PSE) signed a memorandum of collaboration with Singapore Exchange Ltd. (SGX Group) to build up cross-border opportunities.

Both PSE and SGX Group will work on raising intra-region trading by developing new products that suit the demands of their respective investors.