SEC creating new office to encourage SME public offerings

The Securities and Exchange Commission said it is creating a new office to encourage more small and medium enterprises to list in the Philippine Stock Exchange.

SEC chairman Emilio Aquino said in a speech during a forum on initial public offering for SMEs the agency would be committed to create the Office for the Advancement of Strategic Investments in SMEs, or OASIS.

Aquino said OASIS would be tasked to promote the interests of SMEs by simplifying the capital-raising products and streamlining the registration processes.

OASIS will also encourage investment houses and other financial institutions to form and implement an SME-friendly underwriting and/or advisory program. It will engage multilateral agencies such as the Asian Development Bank and International Finance Corp. in launching SME-focused investment funds.

Ninety-nine percent of business enterprises operating in the country are micro, small and medium enterprises.

Aquino said COVID-19, which forced the government to implement mobility restrictions as part of the health protocols to combat the spread of the virus, severely impacted the MSMEs.

“Most of them lacked the funds necessary to bounce back, with the magnitude of the working capital shortage more serious in smaller firms. Further, this prolonged pandemic made it more difficult for MSMEs to raise funds from formal financial institutions and to survive the crisis,” Aquino said.

“Although, the sector’s ability to access finance faces constraints even during non-crisis periods. As some areas are moving to the recovery stage, MSMEs continue to confront a sharp drop in demand and revenue specially as we deal with the continuing threats of Covid-19. With this landscape, it is the government’s thrust including the commission to support the sector’s journey towards recovery,” he said.

Aquinio said an IPO could benefit a growing company in terms of raising money to fund operations, expansion, fuel growth, fund recovery and pay down debt. It also helps boost the economy in terms of creating business opportunities, employment and livelihood.

“Given that, we fully support more IPO listings in the country including in the SME sector. We would be more than happy to see more SMEs undertaking IPOs. It is part of our mission to provide the necessary assistance to achieve this commitment,” Aquino said.