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The Securities and and Exchange Commission (SEC) is imposing a maximum cumulative nine-year term limit for independent directors of publicly listed companies starting in February, a move that will boost board independence, analysts said.

SEC Memorandum Circular No. 7, which was signed by SEC Chairperson Francisco Ed. Lim on Jan. 26, stated that an independent director is elected for a one-year term and can only serve for a maximum cumulative term of nine years in the same listed company.

The circular will take effect on Feb. 1 after publication in two newspapers of general circulation.

Independent directors who were elected before the effectivity of the circular will also be covered by the nine-year limit, starting from calendar year 2012.

For continuous or consecutive service, the nine-year term limit will end on the date of the annual stockholders’ meeting or on another date approved by the SEC.

In cases of intermittent service, the independent director’s total tenure must still not exceed nine years.

Under the circular, if an independent director becomes a non‑independent director or an officer of the company within the nine‑year limit, that person may only be reappointed as an independent director after a two‑year cooling‑off period starting from the date they stop serving in the non‑independent role.

If an independent director serves more than six months, the term will be considered one full year.

All independent directors that have reached the nine-year limit will be “barred perpetually” from re-election as an independent director of the same company. However, the person can still serve as a non-independent director or officer of the same company without a cooling off period.

Incumbent independent directors that have served the maximum nine-year limit at the time of the circular issuance may continue to serve until the company’s 2026 annual stockholders’ meeting.

Under the previous rules, persons can serve as independent directors for up to nine years, but companies may apply for exemptive relief to extend their term.

The new SEC circular removes the flexibility of companies to seek exemptive relief.

Companies that exceed the maximum cumulative term limit for an independent director may face a basic penalty of P1 million per violation, plus P30,000 for each month that the director remains in office beyond the allowed term, in addition to other sanctions under existing laws.

A third or succeeding offense for the same violation may lead to the suspension or revocation of the company’s primary or secondary license.

Stronger governance

Meanwhile, analysts said the tighter rules on independent directors’ term limits will enhance board independence and strengthen governance over time. In the near term, however, they noted this could spark changes in boards of listed firms ahead of the annual stockholders’ meetings this year.

“The term limit for independent directors is a major step to strengthen corporate governance. It will prevent director entrenchment that could affect perceived independence. The limit will likewise open corporate boards to new members with fresh ideas and perspectives,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the cap will ensure directors are really independent and avoid issues like too much familiarity, management capture, and passive oversight.

“It also accelerates board refreshment, which can enhance diversity in skills, age, gender, and professional background,” he said in a Viber message.

Mr. Arce noted that the policy forces companies, especially large conglomerates and banks, to balance director independence with preserving institutional memory, as losing experienced independent directors risks weakening boards if succession isn’t planned ahead.

“Companies that treat this as an opportunity to redesign board composition — rather than merely comply — are likely to emerge with stronger oversight frameworks and clearer role definitions between executive, non-executive, and independent directors,” he said.

BDO Securities President John Tristan D. Reyes said the new rules will help bring in new perspectives and skills as new independent directors are appointed to boards of listed firms.

“In the short term, however, it may create challenges for companies that depend on long‑serving directors with deep knowledge of their business, especially in more complex or regulated sectors,” he said. “As companies prepare for the 2026 annual stockholders’ meetings, many will speed up succession planning, adjust board composition, and provide more detailed disclosures on their refresh plans. Some may face continuity issues if several long‑tenured directors need to step down at the same time,” he added.

Mr. Colet, however, called on the commission to go further, emphasizing that much more can be done to enhance public companies’ governance.

“For example, public shareholders should have a greater say in electing independent directors. This can be done through a requirement that an independent director must also receive a majority of the votes cast by public shareholders, or through a rule that at least one independent director should be elected solely by public shareholders,” he said.

Mr. Arce said investors will also likely scrutinize not just rule compliance but also whether replacement directors bring relevant expertise, genuine independence, and real board influence.

“Poorly executed transitions could raise red flags, while thoughtful board renewal could strengthen investor confidence,” he said. — Alexandria Grace C. Magno

Car sales are expected to breach 500,000 this year, driven by rising demand for electrified vehicles (EVs) and multi-purpose vans, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI).

“We see that there’s a big chance that the market can reach 500,000 this year. That’s around a 2% to 2.5% increase,” said Jose Maria M. Atienza on the sidelines of the CAMPI president turnover ceremony on Tuesday.

“We’re pegging it at around 503,000,” he added. “But again, it would depend on how the market grows coming from the trend.”

Auto industry data showed that 491,395 vehicles were sold in 2025, up 3.7% from 473,842 in 2024. This includes sales of CAMPI and Truck Manufacturers Association, Inc. (TMA) members which reached 463,646 in 2025, down 0.8% from 467,252 units sold in 2024.
“For CAMPI and TMA, same as our projection for industry, around 2%,” Mr. Atienza said.

Mr. Atienza said that the outlook reflects the conservative optimism of the industry after seeing a sales decline in the second half of 2025.

“Right now, we are just accepting the reality of what happened during the second half but are still positive that at least we will bottom out and then see some growth,” he said. “But we are very hopeful that the market will reach 500,000 units.”

In particular, he said that the imposition of excise tax on pickup trucks has resulted in a decline in the segment’s sales, especially in the second semester.

“There was a big reduction in our pickup sales because of the change in excise tax structure. So, there’s a big, actually, there’s a 20% drop in pickup sales in the second half compared to maybe the same period in the previous year,” he added.

Mr. Atienza said industry sales growth this year will be driven by demand for EVs as well as multi-purpose vehicles.

“EVs have improved and increased in terms of sales. We also saw some good segments, such as multi-purpose vehicles like L300s and Tamaraws. I think there was a 70% increase,” he said.

“So, there are growth areas in the market. And again, it would just depend on when it will grow. It is a very sound market, and it would depend on when the customers would again have the confidence to purchase more vehicles,” he added.

Data from CAMPI and TMA showed that 32,489 EVs were sold in 2025, accounting for 7.01% market share. Including other available industry data, CAMPI said that EV sales hit 58,905 units last year, which reflect 12% market share.

“We see this growth [continuing]. But of course, it is just a matter of customer preference and how ready we are. But I think we already saw the increase in hybrid and EV sales in 2023, and it continued into last year,” he said.

“And we are quite positive that with the introduction of additional models, this trend would still continue for EVs,” he added.

He also said that the group is expecting some improvement in the passenger car segment after CAMPI members saw a 23.1% drop in passenger car sales to 92,924 in 2025 from 120,770 in 2024.

“It would depend on how much individual brands can introduce new models. There are cycles of demand, again depending on the model introduction,” he said.

Meanwhile, Mr. Atienza said that the group is hoping the government will implement the Revitalizing the Automotive Industry for Competitiveness Enhancement program.

“We all know how important it is for automotive manufacturing. And we are always here to work with the government and concerned agencies on how to make sure that this is finally implemented,” he said.

“I am sure there are many stakeholders also, not only CAMPI, but individual members and even the parts makers and suppliers who really want to see this program through and finally implemented,” he added.

To further attract car manufacturing, he said that the government must pursue initiatives that will make the country more competitive in terms of cost.

“We have a good cost structure, but there are some areas in cost that are not as favorable. So, that is where collaboration with the agencies should come in on how to make the Philippines a good environment for investments,” he added.

On Tuesday, CAMPI held a ceremonial turnover for its new president, Mr. Atienza, who is also the executive vice-president of Toyota Motor Philippines Corp.’s marketing division. He took over from Rommel R. Gutierrez. — Justine Irish D. Tabile, Reporter

The main stock benchmark rebounded on Tuesday and returned to the 6,300 level as investors picked up bargains following the market’s two-day slump, tracking Wall Street’s climb overnight.

The Philippine Stock Exchange index (PSEi) increased by 0.52% or 33.03 points to end at 6,306.90, while the broader all shares index inched up by 0.01% or 0.65 point to 3,581.08.

“Investors went bargain hunting again after two consecutive days of decline… The local bourse was also supported by the positive spillovers from Wall Street,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

The S&P 500 and the Nasdaq advanced for a fourth consecutive session on Monday, as investors geared up for a slew of megacap earnings and a US Federal Reserve update on interest rate policy later this week, Reuters reported.

The Dow Jones Industrial Average rose 313.69 points or 0.64% to 49,412.40; the S&P 500 gained 34.62 points or 0.5% to 6,950.23; and the Nasdaq Composite gained 100.11 points or 0.43% to 23,601.36.

“The PSEi ended higher after several days of decline, as investors engaged in bargain hunting. Market sentiment was further supported by the ADB’s (Asian Development Bank) forecast that GDP (gross domestic product) growth could reach 6% by 2027 if both private and public investments increase,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “This improved outlook helped lift risk appetite and encouraged selective buying across the market.”

ADB Country Director for the Philippines Andrew Jeffries also said that the country must raise the share of exports in the economy to support long-term growth, as well as diversify its base, and boost resilience.

Sectoral indices closed mixed on Tuesday. Services surged by 1.37% or 34.32 points to 2,535.90; holding firms increased by 1.36% or 68.66 points to 5,088.40; and industrials went up by 0.23% or 20.77 points to 8,987.52.

Meanwhile, mining and oil went down by 1.53% or 288.68 points to 18,515.39; financials fell by 0.65% or 13.86 points to 2,108.60; and property decreased by 0.64% or 14.50 points to 2,252.07.

“Ayala Corp. was the day’s index leader, climbing 3.62% to PHP 529. Alliance Global Group, Inc. (AGI) was at the tail end, falling 5.19% to PHP 7.30,” Mr. Tantiangco said. “This comes following the stock’s announced removal from the PSE index.”

The PSE on Monday said it will add RL Commercial REIT, Inc. to the PSEi and remove AGI effective Feb. 2.

Decliners outnumbered advancers, 112 to 85, while 61 names closed unchanged.

Value turnover surged to PHP 15.85 billion on Tuesday with 2.23 billion shares traded from the PHP 5.77 billion with 1.21 billion issues that changed hands on Monday.

Net foreign buying was at PHP 7.41 billion, a reversal of the PHP 13.06 million in net selling recorded on Monday. — Alexandria Grace C. Magno with Reuters

The main index dropped to the 6,200 level on Monday, hitting a three-week low, as the market opted to stay on the sidelines before the release of Philippine gross domestic product (GDP) data and amid geopolitical concerns.

The Philippine Stock Exchange index (PSEi) slumped by 0.93% or 59.39 points to close at 6,273.87, while the all shares index declined by 0.52% or 18.88 points to finish at 3,580.43.

This was the stock benchmark’s lowest close in three weeks or since it finished at 6,164.53 on Jan. 5.

“The PSEi ended lower, extending its decline from last week after breaking below the 6,300 level. Trading was cautious as buying pressure stayed on the sidelines,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Expectations of a low fourth-quarter GDP print dampened sentiment, prompting continued profit taking and defensive positioning across sectors.”

“The market took a defensive stance, selling local equities amid rising geopolitical uncertainty and in anticipation of the weak 4Q25 GDP growth print on Thursday,” AP Securities, Inc. likewise said in a market note.

The Philippine Statistics Authority will release fourth-quarter and full-year 2025 GDP data on Thursday, Jan. 29.

The economy may have grown by an annual 4.2% from October to December, according to a median forecast of 18 economists polled by BusinessWorld.

If realized, this is much slower than the 5.3% expansion in the same period in 2024 but would be faster than the over four-year low of 4% recorded in the third quarter of 2025.

This would put the full-year average at 4.8%, below the government’s 5.5%-6.5% growth target. This would also be slower than the 5.7% expansion in 2024 and the weakest since the 9.5% contraction posted in 2020.

Analysts said slower government spending and weakening investor confidence due to a wide-ranging corruption scandal involving anomalous flood-control and infrastructure projects likely continued to drag economic growth.

Most sectoral indices closed in the red. Services sank by 2.06% or 52.79 points to 2,501.58; property decreased by 1.13% or 25.95 points to 2,266.57; industrials went down by 0.78% or 70.99 points to 8,966.75; and holding firms retreated by 0.73% or 37.13 points to 5,019.74.

Meanwhile, mining and oil surged by 3.22% or 587.72 points to 18,804.07, and financials went up by 0.44% or 9.44 points to 2,122.46.

Market breadth was negative as decliners outnumbered advancers, 117 to 88, while 62 names closed unchanged.

Value turnover went down to PHP 5.77 billion on Monday with 1.21 billion shares traded from the PHP 6.29 billion with 758.07 million issues that changed hands on Friday.

Net foreign selling decreased to PHP 13.06 million from PHP 574.16 million. — AGCM

Philippine automative sales can reach 500,000 this year if interest rates improve after sales in 2025 fell short of the industry’s target, analysts said.

A joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) sent on Friday showed that 463,646 cars were sold last year, down by 0.8% from 467,252 units sold in 2024.

Including other industry data, CAMPI said total vehicle sales stood at 491,395 units in 2025, up 3.7% from 473,842 a year prior.

In December alone, CAMPI-TMA members sold 42,870 units, up 2% from 42,044 units sold in the same period a year ago.

“The industry delivered a modest growth last year due to the overall unfavorable market environment during the second half caused by a number of factors such as the reimposition of excise tax on pickup trucks and several natural calamities experienced across the country,” CAMPI said.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that the slight dip in car sales last year reflects “more of a pause than a downturn.”

“Still elevated interest rates, fuel prices, and tighter household budgets made buyers cautious, especially for passenger vehicles, which are more discretionary,” he said in a Viber message.

“That is why CAMPI fell short of the 500,000 target — demand did not disappear; it was delayed,” he added.

According to the industry report, passenger car sales dropped by 23.1% to 92,924 in 2025 from 120,770 in 2024.

In December alone, passenger car sales declined by 20.9% to 8,009 from 10,125 units sold in the same period a year prior.

Commercial vehicle sales, which accounted for almost four-fifths of the total industry sales, rose by 7% to 370,722 in 2025, from the 346,482 units sold in 2024.

In December alone, commercial vehicle sales increased by 8.6% to 34,861 from 32,109 units sold in the same month in 2024.

“The underperformance of passenger vehicles reflects shifting consumer preferences and structural changes in the market,” said Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., in a Viber message.

“Buyers are increasingly favoring used vehicles, ride-hailing, or shared-mobility options, particularly in urban areas where traffic congestion and ownership costs reduce the appeal of owning a private car,” he added.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said that the decline could also be attributed to the faster growth in motorcycle sales in recent months.

“[They] have become a cheaper alternative transport for some Filipinos in terms of lower acquisition costs, maintenance costs, fuel consumption, and space requirements,” he said in a Viber message.

He said that demand for motorcycles has been increasing due to the “boom in delivery and motorcycle taxi services.”

Broken down, sales of Asian utility vehicles jumped by 7.2% to 87,731, while sales of light commercial vehicles went up by 7.2% to 271,630 units.

In 2025, sales of medium-duty trucks slipped by 7.1% to 3,690, while sales of light and heavy trucks grew by 3.6% and 20.5% to 6,783 and 888 units, respectively.

“Sub-segments such as the 1Ton+ multi-purpose vehicles contributed to the industry’s 2025 performance, with a 76.6% increase compared to 2024,” CAMPI said.

“Models in this category include Toyota Tamaraw, Mitsubishi L300 FB, and Isuzu Travis, among others,” it added.

Toyota Motor Philippines Corp. remained the market leader, with sales of 229,447 units in 2025, up by 5.2% from 218,019 units in 2024. It accounted for 49.49% of the market share.

Mitsubishi Motors Philippines Corp. ranked second with a market share of 18.72% after sales fell by 2.6% to 86,808 units from 89,124 units a year ago.

In third spot was Suzuki Phils., Inc., whose sales increased by 7.9% to 21,984 with a market share of 4.74%.

Rounding out the top five were Ford Motor Co. Phils., Inc., which saw a 22.2% drop in sales to 21,784, and Nissan Philippines, Inc., which saw a 23.2% decline in sales to 20,571 units.

Outlook

Meanwhile, Mr. Arce said the industry can reach 500,000 sales this year, but the outlook is still sensitive to economic and policy developments.

“Reaching the 500,000 mark in 2026 will likely depend on a combination of lower financing costs, improved affordability, and a clearer value proposition for consumers, rather than a broad-based surge in demand across all vehicle segments,” he said.

In particular, he said the central bank’s easing monetary policy has the potential to “unlock pent-up demand from consumers who postponed purchases in 2025.”

“Continued infrastructure development, fleet modernization, and stronger business confidence could support commercial vehicle sales, while broader availability of more affordable models and improved supply chains may help revive passenger vehicle demand,” Mr. Arce said.

However, he said that “any renewed inflationary pressures, slower economic growth, or delays in interest rate cuts could again weigh on consumer sentiment.”

“Looking to 2026, hitting 500,000 units is achievable if financing conditions ease and income growth improves,” said Mr. Ravelas.

“The main challenges remain inflation, exchange rate volatility, and expensive credit — but if these ease, 2026 could be the year pent-up demand comes through,” he added.

Electric and hybrid vehicles may also boost industry sales this year.

Data from CAMPI and TMA showed that 32,489 EVs were sold in 2025, accounting for 7.01% market share.

Including other available industry data, EV sales hit 58,905 units, which reflect 12% market share.

“Combined battery, plug-in hybrid, and hybrid EV sales grew 142.5% versus 2024,” said CAMPI President Jose Maria Atienza in a statement on Friday.

“This highlights the public’s growing acceptance and demand for electrified technologies,” he added.

Mr. Ricafort said that better weather conditions in 2026 could help increase demand for cars.

He also cited the increased demand for EVs and hybrid vehicles as potential sales growth drivers amid increasing competition, which is helping “reduce prices and increase options for Filipino buyers.” — Justine Irish D. Tabile, Reporter