By Catherine N. Pillas
Business groups have asked the Department of Trade and Industry (DTI) and the National Competitiveness Council (NCC) to consider repealing or suspending some issuances of the Securities and Exchange Commission (SEC) and the Board of Accountancy (BOA) that are hurting the competitiveness of small and medium enterprises (SMEs).
In a letter to Trade Secretary Adrian S. Cristobal Jr. and NCC Private Sector Cochairman Guillermo M. Luz, the Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines (Ecop) and Philippine Exporters Confederation Inc. (PhilExport) enumerated the SEC and the BOA issuances that are “burdensome” to SMEs. The PCCI, Ecop and PhilExport made the appeal in line with the NCC’s Project Repeal program, which was proposed in the first NCC board meeting held in January.
Project Repeal seeks to establish a “systematic review and repeal process” of legislation, executive and departmental orders and even local government ordinances and issuances to streamline regulations.
The three groups acted on the proposal immediately, targeting what they deem are difficult requirements that SMEs have no capacity to meet. The SEC-related issuances identified by the business groups for either suspension or review are:
■ Memorandum Circular (MC) 6–2014, requiring the complete address of corporations and partnerships in their amended articles of incorporation/partnership;
■ MC 20-2013, directing all board directors and key officers of publicly listed firms to attend at least once in a year trainings on corporate governance conducted by SEC-accredited training providers; and
■ MC 10-2014, or the guidelines to implement Revenue Regulation 1-2014 of the Bureau of Internal Revenue (BIR), which requires the submission of the alphalist disclosing specific income and taxes paid.
The groups also cited a new policy of the BOA requiring companies with revenues above P10 million a year to engage Certified Public Accountants to prepare financial statements and to sign a Certificate of Preparation and Disclosures Notes to be attached to annual financial statements.
On MC 6-2014, in lieu of providing the complete address of corporations and partnerships, the groups suggested that a board resolution from the company should suffice to avoid costs and time in amending the articles of incorporation and partnership. The groups are also asking for a prospective implementation of the circular.
Incurring additional cost, meanwhile, was the reason the groups opposed MC 20-2013.
“Additional burden may come from board members in regional headquarters outside the country who will have to fly in to comply with this policy,” the groups said, suggesting that attendance to these seminars be left to the discretion of the company. They also sought to be allowed to resort to online means to disseminate information.
Stronger opposition was aired by the three groups on MC 10–2014, a tax-related measure, for reasons of compromising company competitiveness and possible violation of the country’s bank secrecy laws.
“We propose that the policy be suspended, as it poses a grave threat to our ability to attract local and foreign investments,” the groups added. On the BOA’s policy, the organizations similarly sought for a suspension, as they argued that its implementation is prejudiced against SMEs and is a redundant requirement.
“The BOA rule is ‘unnecessary and redundant,’ since all financial statements submitted to the SEC and the BIR are already required to have a duly-signed Statement of Management’s Responsibility,” the business groups said in their letter.
Existing rules and regulations are already in place to ensure the integrity of companies’ financial statements, they said further.
The PCCI, PhilExport and Ecop are expected to come out with another list of regulations for review or repeal to the NCC, but this time on non-SEC-related matters.