Business groups urge review of SEC rules in competitiveness

MANILA, Philippines - Local business groups are urging the government to review and repeal existing Securities and Exchange Commission (SEC) laws and policies they believe are affecting the country’s business competitiveness.

In a position paper, the Philippine Chamber of Commerce and Industry (PCCI), Philippine Exporters Confederation Inc. (Philexport) and the Employers Confederation of the Philippines (Ecop) identified four issues related to SEC issuances that are seen to have an “adverse effect” on business competitiveness.

The position paper sent to Department of Trade and Industry Secretary Adrian Cristobal Jr. and National Competitiveness Council private sector co-chairman Guillermo Luz requested the DTI and NCC to look at the issues related to SEC issuances.

First on the business groups’ list is the SEC memorandum circular which requires the complete address of corporations and partnerships in their amended articles of incorporation or partnership.

The business groups said a board resolution should be enough compliance to the circular, “to avoid the additional cost and time to process the amendment application.”

 “This is especially true for our member-business support organizations composed of small and medium enterprises, many of whom are only renting office space and would tend to re-locate to other facilities offering lower rent. Considering the traffic, we also face the difficult task of coming up with a quorum in stockholders’ meetings with only this agenda of amending the address,” the groups said.

Another issue on the groups’ list is a memorandum circular which directs all board directors and key officers of publicly-listed firms to attend at least once a year trainings on corporate governance conducted by SEC-accredited training providers.

 “We believe this proposal will only benefit the service providers at the expense of publicly-listed firms,” they said.

 “Seminar participation may only bring extra unnecessary cost. In addition, additional burden may come from board members in regional headquarters outside the country who will have to fly in to comply with this policy,” the groups said.

The business groups also urged for the suspension of the guidelines to implement Revenue Regulation 1-2014 which requires the submission of the list disclosing specific income and taxes paid.

 “We propose that the policy be suspended, as it poses a grave threat to our ability to attract local and foreign investments as this is another grave abuse of discretion in issuing regulations without regard to the right to privacy,” the groups said.

 “This disclosure may compromise the safety of people and companies if they are identified by unauthorized third parties. Further, the integrity of a particular market of the taxpayer could be affected by the release of such information and the requirement for such disclosure may entail that companies violate the bank secrecy laws,” they added.

Lastly, the business groups criticized the new policy of the Board of Accountancy requiring companies with revenues above P10 million a year to engage certified public accountants to prepare financial statements and to sign a certificate of preparation and disclosures notes to be attached to annual financial statements.

 “This is a clear case of vested interests compromising the competitiveness of corporations especially SMEs that will be prejudiced by this imposition. The BOA rule is unnecessary and redundant, since all financial statements submitted to the SEC and the Bureau of Internal Revenue are already required to submit a duly-signed statement of management’s responsibility,” they said.

The PCCI, Philexport and ECOP said the issues they presented are just an initial list as there are other non-SEC issues they would be raising in separate position papers.