The new chairman of the Securities and Exchange Commission (SEC), Francis Lim, took his oath of office on Tuesday and pledged to revitalize the capital market, which he said has been “lagging behind.”
Speaking on the sidelines of the SEC’s turnover ceremony, Lim, who was once president of the Philippine Stock Exchange (PSE), outlined several initiatives he now plans to pursue during his term. Most of those are plans to continue his advocacies as PSE chief.
Lim said his focus will be on encouraging more government-owned and controlled enterprises to list on the PSE; look at private enterprises that were given government incentives with the commitment that they would list part of their shares on the stock market; the passage of a law that will incentivize companies to go public; and lower the cost of transaction for businesses with the SEC, particularly the micro, small and medium enterprises (MSME).
Lim took his oath of office on Tuesday, the same day of the SEC leadership turnover.
The new SEC head vowed to expand the list of publicly listed government-owned and controlled corporations (GOCCs) and incentivize enterprises. He was a vigorous advocate for GOCCs to list during his term as PSE president, from 2004 to 2010.
This initiative resulted in the 2006 listing of the Philippine National Oil Co. – Energy Development Corp. (PNOC-EDC), and the initial public offering (IPO) of the National Reinsurance Corporation of the Philippines (NRCP) in 2007, among others.
As for the incentivized companies, the PSE, then, under Lim, pushed for companies that, under laws like the Energy Power Industry Reform Act (EPIRA) and the Oil Deregulation
Law, were required to sell part of their ownership to the public.
The upcoming initial public offering (IPO) of water distributor Maynilad Water Services Inc. is an example of incentivized companies that are required to list a portion of their shares on the stock market. However, in the case of Maynilad, it is tied to its franchise approval.
“That has not been fully implemented. The philosophy is that you are given incentives, and then you share the blessings with the public. Unfortunately, that has not been done,” Lim said.
Meanwhile, Lim said he also plans to push for the passage of a “Capital Market Competitiveness Act,” the draft of which he was working on during his stint in the PSE.
Lim said he intends to work with the PSE in revisiting the draft bill, which aims to ease the business process for companies listed on the stock market.
“That’s one thing that I intend to pursue,” he said.
While still on the drawing board, one particular proposal under the draft bill is making listed companies less of a priority under the scrutiny of regulators, such as the Bureau of Internal Revenue (BIR), Lim said.
The PSE under Lim had signed a memorandum of agreement with the BIR, which prioritizes newly listed firms as the last in its audit and investigation program. This incentive is offered to companies that go public, with the priority lasting for five years after the initial listing date.
This means that these companies have the privilege of being the last to be audited in the assessment and collection of corporate income taxes by the BIR.
In 2009, the PSE also attempted to persuade lawmakers to relax the country’s tax rules, as is the practice in countries such as Thailand, Indonesia, and Vietnam, which have established a lower tax bracket for companies that list on the local exchange for a specified period.
Lim noted the slow growth of the capital market and the need for initiatives to make it robust.
“Let’s also be honest: the Philippine capital market has been lagging behind. Inclusive growth demands deeper, broader, and more accessible capital markets. We will leave no stone unturned to catch up—and with God’s help and our collective will, we will lead.”
This means working not only within the SEC, but with partners such as the PSE, PDEx (Philippine Dealing and Exchange Corp.), non-governmental organizations, and the three branches of government to push for meaningful reforms, Lim said.
Lim vowed to resolve all pending applications quickly and responsibly. “The law sets clear timeframes. While we recognize the complexity of our work, we must uphold the standards. If this means working nights, weekends, or holidays, then that is what public service demands,” he added.
Lim also said the SEC will work to lower the cost of transactions for businesses in the agency, particularly for the micro, small, and medium enterprises (MSMEs).
“Regulation must support, not suffocate. But let’s be clear: systems are only as good as the people who run them,” Lim added.
