SEC chief wants GOCCs to list on stock market

Francisco Ed. Lim, the new chairperson of the Securities and Exchange Commission (SEC), is hoping to encourage Philippine government-owned and -controlled corporations (GOCC) to list on the stock exchange to spur investor activity.

“It is being done in Vietnam, their state-owned enterprises (SOEs) are listing. Let’s take a look at them (SOEs) and see which are listable,” Mr. Lim said during a media briefing after officially taking the helm on the SEC on Tuesday. 

There are no GOCCs, also known as SOEs, listed on the Philippine Stock Exchange (PSE).

Mr. Lim, who also served as PSE president from 2004 to 2010, said he will also look into the implementation of laws that require the public listing of companies availing of government incentives.

“There are laws that require companies, who avail of incentives, to go public. That’s not being fully implemented. We give you incentives, but you should share your blessings with the public. Unfortunately, that has not been done,” he said.

In its Capital Market Review of the Philippines last year, the Organisation for Economic Co-operation and Development (OECD) said there are many Philippine SOEs that are candidates for public listing such as Land Bank of the Philippines and Development Bank of the Philippines.

The OECD also said the Philippines could grow its capital markets by listing the minority stakes of financially significant SOEs.

SOEs occupy a significant share of market capitalization in other ASEAN countries like Singapore, Indonesia, Malaysia, and Vietnam.

Sought for comment, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said that the proposal to push the public listing of SOEs is a viable option to boost the market.

“It’s a welcome move to increase market depth. And it will provide other sources of funding for GOCCs other than taxpayer money,” he said in a Viber message.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said there should be efforts to push the listing of “high quality” GOCC on the stock exchange.

“That would help boost our equity market and provide an alternative avenue for government fundraising. To be a viable IPO (initial public offering) candidate, a GOCC should have strong financials and prospects as well as a professional, business-oriented culture,” he said.

Changes?

Meanwhile, Mr. Lim plans to form task groups composed of the SEC, the PSE, and the Philippine Dealing and Exchange Corp. to determine what needs to be done to boost the capital market.

“The task groups will tell us what needs to be done, how to amend the rules, how to streamline, and so on and so forth. Simple but easy to enforce or implement,” he said.

“It’s no secret that while we are one of the oldest exchanges, our market still lags behind. It’s ensuring that the investing public will trust their money with our market,” he added.

Mr. Lim also plans to resolve all the pending applications and deliverables of the SEC.

“The law sets clear timeframes. While we recognize the complexity of our work, we must uphold the standards,” he added.

Mr. Lim will also focus on implementing current initiatives rather than push for more reforms, adding that the SEC will further streamline its processes and requirements.

“We have all the laws. We have amendments to the Real Estate Investment Trust Act… There are also amendments about the Personal Equity and Retirement Account Act. It’s just a matter of pushing them harder and harder. It’s more execution and implementation than more reforms,” he said.

Meanwhile, Mr. Lim also said he will explore reductions in the SEC’s fees to help micro, small and medium enterprises.

“Regulation must support, not suffocate,” he said.

Asked about the previously allowed lower initial public float for some IPOs, Mr. Lim said the market should be allowed to decide.

The SEC previously allowed an initial public float of 15% for some companies seeking to go public through exemptive relief.

“If an issue is attractive, it is not a problem,” he said. – Revin Mikhael D. Ochave, Reporter