SEC creates new office to encourage public offerings from SMEs

The Securities and Exchange Commission said it is establishing a new office to encourage more SMEs to list on the Philippine Stock Exchange. SEC Chair Emilio Aquino said in a speech at a forum on IPOs for SMEs that the agency would be committed to establishing the Office for the Advancement of Strategic Investments in SMBs, or OASIS. Aquino said OASIS would be tasked with serving the interests of SMEs by simplifying capital raising products and streamlining registration processes. OASIS will also encourage investment houses and other financial institutions to set up and run an SME-friendly underwriting and/or advisory program. It will support multilateral agencies such as the Asian Development Bank and International Finance Corp. involvement in launching investment funds aimed at SMEs. Ninety-nine percent of the companies operating in the country are micro, small and medium-sized enterprises. Aquino said COVID-19, which forced the government to introduce mobility restrictions as part of health protocols to curb the spread of the virus, had serious implications for MSMEs.

“Most of them didn’t have the resources needed to back out, and the magnitude of the working capital shortfall was more severe in smaller companies. Furthermore, this prolonged pandemic made it more difficult for MSMEs to raise funds from formal financial institutions and survive the crisis,” Aquino said. “Although the sector’s ability to access finance even during non-crisis periods faces constraints. As some areas move into recovery, MSMEs continue to face a sharp decline in demand and revenues, especially as we deal with the ongoing threats of Covid-19. With this landscape, it is the thrust of the government, including the committee, to support the sector’s journey to recovery,” he said. Aquinio said an IPO can benefit a growing company by raising money to support operations, expansion , fuel growth, fund recovery and debt redemption. It also helps stimulate the economy in terms of business opportunity creation, employment and livelihoods. “Given that, we are fully supporting more IPO listings in the country, including in SMEs We’d like to see more SMEs take up IPOs, and it’s part of our mission to provide the necessary help to make this commitment a reality,” said Aquino.