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IFC and Philippine SEC Revise Corporate Governance Code to Enhance Transparency, Shareholder Protection

Manila, the Philippines, January 3, 2017— IFC, a member of the World Bank Group, and the Philippine Securities and Exchange Commission (SEC) today announced a new corporate governance code for publicly listed companies, which aims to improve the functioning of boards, strengthen shareholder protection and promote full disclosure in financial and non-financial reporting. The new code provides guidance for Philippine publicly listed companies to adopt best governance practices, which will improve their competitiveness and ability to attract foreign investment.  
The new code will increase the responsibilities of the board and ensure the competence and commitment of its directors. The code adopts a “comply or explain” approach that combines voluntary compliance with mandatory disclosure. Companies do not have to fully comply with the code, but they must state in their annual corporate governance reports whether they comply with the code provisions, identify any area of non-compliance, and explain the reasons for non-compliance.
“The new code is intended to raise the corporate governance standards of Philippine publicly listed corporations to a level on par with its regional and global counterparts,” said Chairperson Teresita J. Herbosa of the Philippine Securities and Exchange Commission. “The adoption of the ‘comply or explain’ approach is also expected to address the perceived overregulation of the SEC.”
The code will take effect on January 1, 2017. All publicly listed companies are required to submit a new Manual on Corporate Governance to the SEC on or before May 31, 2017.
The code revision is part of IFC and the SEC’s partnership to enhance the country’s regulatory framework and investment climate. Numerous studies report that investors have greater confidence in companies with good governance and in markets that are backed by sound legal and regulatory regimes. More foreign investment will create jobs, strengthen the business environment, and improve private sector efficacy.
“Our global experience has shown that corporate governance codes set a benchmark and encourage companies to adopt effective governance practices,” said Jane Yuan Xu, IFC Philippines Country Manager. “Improved corporate governance will make Philippine companies more competitive and enhance their ability to attract foreign capital, leading to the development of a vibrant and sustainable private sector.”
IFC’s support for the development of a corporate governance code in the Philippines is part of its efforts to promote effective corporate governance in partnership with the State Secretariat for Economic Affairs of Switzerland. In addition to working with the Philippine government and regulatory bodies, IFC also supports the local institute of directors and provides corporate governance advice to Philippine companies. IFC has contributed to the adoption of 95 corporate governance codes, laws, and regulations in more than 30 countries worldwide.
The Code of Corporate Governance For Publicly Listed Companies is embodied in SEC Memorandum Circular No. 19, series of 2016. Copies may be downloaded from the SEC website using the link:
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit
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About the Securities and Exchange Commission of the Republic of the Philippines
The Securities and Exchange Commission is the Philippine government’s regulatory agency charged with supervision over the corporate sector, capital market participants, the securities and investment instruments market, and the investing public. The commission’s mission is to develop and regulate the capital market and supervise company registration toward good corporate governance, protection of investors, widest participation of ownership, and democratization of wealth.