Around 400 companies, including state-owned enterprises, could list in the local bourse if the corporate regulators strengthen measures that would make the process more attractive.
An assessment by the Organisation for Economic Cooperation and Development (OECD) on the Philippine capital market said one of the barriers to listing is the perception that public equity offerings involve a lengthy process both by the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).
To address this perception, the OECD said SEC and PSE could pursue a joint initiative to shorten the process. Regulators may also commit to a shorter approval period for initial public offerings (IPOs), providing companies greater certainty and predictability and encouraging more to go public.
The local bourse has relatively fewer number of listed firms compared to other Southeast Asian countries. It also lags behind other countries in terms of frequency and size of initial public offerings.
Meanwhile, the OECD noted that the bond market could serve as another vital source of financing for corporations through streamlined registration processes and improved transparency by local credit ratings agencies.
“I am optimistic that there is a clear momentum in the Philippine economy, that many important reforms already in the works will also support capital markets and that there is a genuine will to address perceived areas for improvement,” said Carmine Di Noia, OECD director for financial and enterprise affairs in his presentation of the report.
The SEC requested OECD in 2023 to make an in-depth study and provide an objective, third-party and globally-informed perspective of the Philippine capital market to ensure sustainable economic growth.
“The SEC welcomes the assessment by the OECD of the market conditions and issues that have shaped our financial system over the years,” SEC chairperson Emilio Aquino said.
“The report serves as a helpful guide for the SEC and affirms some of the priority areas that we have identified in order to bring us at par with our Asian peers. We remain committed to fostering a robust and dynamic capital market, consistent with our goal of becoming one of the best in Southeast Asia,” he said.
