The Philippine Stock Exchange plans to reduce the minimum offering size for companies seeking to issue preferred shares to P500 million from the current P1 billion.
PSE president Ramon Monzon said the local bourse also aims to lower the shareholder base requirement to 200 from 1,000.
The proposal is intended to make preferred share offerings more accessible by lowering both capital requirements and entry barriers. Under existing rules, unlisted companies planning to conduct an initial public offering through the issuance of preferred shares must offer at least P1 billion worth of shares and have a minimum of 1,000 shareholders.
The move addresses concerns that the current P1-billion requirement is too costly and restrictive, particularly for unlisted firms. Monzon said reducing the shareholder requirement also reflects market realities, as preferred share offerings are often dominated by institutional investors rather than a broad retail base.
Monzon said the proposed changes could help attract more small and medium enterprises (SMEs) and support financing needs.
“Hopefully we can target some SMEs who need the financing,” Monzon said.
In 2022, the PSE began allowing unlisted firms to issue preferred shares on the local bourse. Monzon noted that the original framework was tailored toward large corporations, such as San Miguel Global Power Holdings Corp., the power generation arm of conglomerate San Miguel Corp., which has conducted offerings overseas.
The rules also target public-private partnership (PPP) firms that are reluctant to offer common shares through an IPO because their projects have not yet fully realized their value. Despite the rule being in place for three years, no unlisted firm has debuted on the local bourse through a preferred shares offering.
Monzon said he hopes the proposed amendments, along with pending changes to Real Estate Investment Trust (REIT) rules, will boost stock market listings.
