Philippines ties governance reforms to ASEAN capital market integration
The SEC says regional integration will require common governance standards, as it pursues director tenure limits and higher capital requirements for brokers.
The Philippines is pursuing corporate governance changes to prepare its companies for closer links between Southeast Asian capital markets, Securities and Exchange Commission (SEC) chairman Francis Lim said. Regional regulators are working towards greater integration under an action plan running until 2030.
Lim told reporters that participating markets would need to agree on common rules for governance and fair competition. He said Philippine companies must meet regional standards and that the country should adapt to ASEAN rather than expect the bloc to adjust to it.
Among the SEC's measures is a circular issued in January limiting independent directors to nine years in office. The regulator introduced the cap to bolster business confidence and prevent boards from being dominated by a small group of people. GMA Network Inc. challenged the measure in court before withdrawing its challenge and complying.
The SEC has also proposed increasing brokers' minimum capital requirement from ₱100 million to ₱120 million to account for inflation. Some of its governance reforms have faced court challenges.
Lim said the changes would help local businesses pursue overseas opportunities, citing Jollibee Foods Corp.'s interest in a Hong Kong cross-listing through its international unit.
Separately, the Philippine Stock Exchange and Singapore Exchange Ltd. (SGX Group) signed a memorandum of collaboration on cross-border opportunities. They plan to develop products suited to their respective investors to encourage more trading within the region.
