The Securities and Exchange Commission (SEC) is encouraging more companies to tap the capital markets, in hopes that there would be over 800 companies listed at the Philippine Stock Exchange (PSE) by 2024.
“We challenge ourselves that by the time we celebrate our 88th year anniversary on November 11, 2024, there are at least 888 companies that would have tapped the capital market for their capital raising activities,” SEC Chairperson Emilio B. Aquino said at the second day of the PSE’s Road to IPO (initial public offering) for small and medium enterprises (SME) on Friday.
To achieve this goal, the SEC wants more SME firms to consider listing at the PSE. There are currently 272 companies listed at the local bourse, only seven of which are part of the SME board.
“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,” Mr. Aquino said.
In line with this, the regulator said it is creating the Office for the Advancement of Strategic Investments in SMEs or the so-called (OASIS), which will be working with other government agencies and the private sector to help SMEs tap the capital market via developmental and regulatory programs.
The new office aims to “simplify the capital raising products” and streamline the registration process for the SMEs. It also aims to encourage investment houses and financial institutions to have “SME-friendly” underwriting and/or advisory programs.
“[It will also] engage multilateral agencies such as ADB (Asian Development Bank) and [the] IFC (International Finance Corp.) in launching SME-focused investment funds,” said Mr. Aquino.
However, the SEC reiterated that market-based financing should not be considered as a substitute for business funding.
“Capital market-based financing should complement and supplement the traditional source of financing for SMEs. Bank financing and capital market financing, we believe, can co-exist,” said Vicente Graciano P. Felizmenio, Jr., director of the SEC’s Markets and Securities Regulation Department. — Keren Concepcion G. Valmonte