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MANILA, Philippines — Some of the country’s largest business groups as well as small and medium enterprises are crying foul over proposed hefty increases in some of the fees charged by the Securities and Exchange Commission (SEC)—a move seen as ill-timed as the local economy remains on soft ground.
In a joint letter to the SEC dated Oct. 2 but released on Monday, the Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, and other top private sector organizations said that while President Marcos and his economic team were actively inviting investors into the country and struggling to keep the ones already here, the SEC was “doing exactly the opposite by proposing unnecessary and unconscionable increases in fees.”
A table of proposed fee hikes seen by the Inquirer shows hefty increases.
Significant increases
Unlisted companies declaring stock or cash dividends worth less than P50,000 will see a 400-percent hike in fees from P500 to P2,500, while those declaring dividends over P50,000 will see a similarly sized fee hike from P1,000 to P5,000.
What used to cost a firm P1,000 for amending by-laws or articles of incorporation will rise to anywhere between P2,000 to P3,500 depending on what kind of company is making the change.
For those who want to petition the regulator to set aside a suspension or revocation order, they will have to pay P20,000 under the proposed schedule, up from P3,000. For corrections to articles of incorporation or by-laws, the fee will rise to P15,000 to P3,000.
The business groups also cited that the SEC proposes to charge corporate bond issuers 1/4 of 1 percent of the total indebtedness.
“Using 2022 numbers, SEC’s fees would amount to P1.27 billion on the total bond issuances of P508 billion for that year,” read a part of the letter.
Friction cost
“SEC also proposes to impose a fee on the total transactions cleared and settled in the previous year by Securities Clearing Corporation of the Philippines and the Philippine Depository Trust Corporation in the amount of 0.1 basis point and 0.05 basis point, respectively,” it read further.
Based on 2022 transactions, the business groups said that the fees on the total transaction cleared and settled would amount to P14.51 million and P7.25 million of additional friction cost for stock market investors.
The private sector groups argued that these fees and charges are objectionable, citing that they are even higher than the relevant fees struck down by the Supreme Court that the SEC tried to impose back in 2012 and 2013.
“Fees that far exceed the costs of regulation are beyond the authority and power of the SEC to impose. If the purpose is regulatory—and not revenue generation—then the test of reasonableness vis-à-vis costs to regulate should be met in order to increase the processing fees of SEC,” read the letter, highlighting that this standard has not been met by the SEC in coming up with the proposed fee increases.
Aside from the PCCI, other business groups that signed the letter were the Philippine Exporters Confederation Inc., Philippine Franchise Association (PFA), Management Association of the Philippines (MAP), Philippine Association of Legitimate Service Contractors (Palscon) , Federation of Filipino Chinese Chambers of Commerce and Industry Inc. (FFCCCII), and Philippine Food Processors and Exporters Organization Inc. (Philfoodex).
Think tank Stratbase ADR (Albert del Rosario) Institute for Strategic and International was also a signatory.
SMEs told the Inquirer that the proposed fee hikes go against the government’s thrust of promoting the Philippines as an investment destination.