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Changing its initial suggestion to raise its fees and charges following a discussion with two business organizations that have expressed concerns.
The committee, headed by Emilio B. Aquino, convened on Thursday with delegates from the Philippine Chamber of Commerce and Industry (PCCI) and the Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) to address the contentious proposal of increasing fees and charges.
“Yes (we are open to changes)… That’s the reason why we are exposing these drafts because we’re open to suggestions. But of course, on our side, we’ll have to make a case on why we came up with the proposal,” he said during a media roundtable in Makati City.
According to Mr. Aquino, the SEC is currently prioritizing their amnesty program for companies, which will end on November 6th, rather than implementing a fee increase. This program allows companies to avoid fines and penalties for not filing their general information sheet, annual financial statements, and being noncompliant.
“This is simply a suggestion. Therefore, we are requesting feedback from all parties. Our goal is to prioritize the needs of our customers… We are not implementing this alone. I believe we have fulfilled all the necessary criteria for these adjustments,” he stated.
Commissioner McJill Bryant T. Fernandez of the Securities and Exchange Commission informed journalists that a follow-up meeting with the heads of the business organizations will take place in two weeks to address their concerns.
“Their suggestion was to organize a meeting with the leaders of these business organizations, which we gladly accept. We are setting aside time to have a discussion with them. The entire Commission is available to meet with them and address each point in detail,” he stated.
A number of business organizations and associations expressed disapproval of the SEC’s plan to raise its fees and charges in a letter dated October 2. They described the proposal as “anti-business” and “unnecessary.”
During the meeting on Thursday, Mr. Fernandez mentioned that the representatives from PCCI and FFCCCII expressed regret for the language and content of the letter.
He stated that they have expressed regret for the way the letter was written.
Mr. Fernandez stated that the SEC and business organizations are considering releasing a joint statement after the issue has been resolved.
Commissioner Kelvin Lester K. Lee of the SEC stated that the commission has sufficient evidence from market research to support its plan to increase fees and charges.
The SEC previously stated that the current rates have not been modified since 2017 and were established according to a 2014 suggestion.
“Ultimately, I believe we have a strong argument for the direction we are taking, as it has been successful. We must commend our technical team who has dedicated an extended period of time to this project,” stated Mr. Lee.
Unfortunately, according to PCCI President George T. Barcelon, businesses were not consulted regarding the suggested increase in SEC fees and charges.
Mr. Barcelon stated during a media briefing that while the SEC has not raised charges since 2014, the business sector is still worried about the significant jump in the increase.fing on Thursday.
He mentioned that the SEC and private industry are open to discussing the issue and finding a resolution.
Mr. Barcelon stated that the issue is still open for discussion, and it is important for them to have a say in the matter. They are also examining the rates charged by other countries in order to remain competitive in attracting foreign investments.
The business organizations had raised concerns about excessive fees and charges, including the suggestion to impose a fee of 0.25% of total debt on corporate issuers for creating bonded debt.
“The groups stated that, based on figures from 2022, the Securities and Exchange Commission’s fees would reach P1.27 billion for the total bond issuances of P508 billion in that year.”
The business organizations were against the suggested charge on the overall transactions that were processed and settled by the Securities Clearing Corporation of the Philippines and the Philippine Depository Trust Corporation in the prior year, at a rate of 0.1 basis point (bp) and 0.05 bp, respectively.
According to the 2022 transactions, the groups stated that this would result in an extra cost of P14.51 million and P7.25 million for stock market investors.
Based on reports from business organizations, the SEC is collecting significantly more in fees than it costs to run its operations.
The business organizations also pointed out that the SEC’s plan to implement excessive fee hikes could dissuade potential investments in the nation.
Small and medium enterprises under SEC coverage will also be negatively impacted by the raised cost of conducting business, as the fee increases will have a domino effect, according to their statement.
In addition to the PCCI and FFCCCII, the SEC received a letter signed by the Management Association of the Philippines, Philippine Retailers Association, Philippine Franchise Association, Chamber of Thrift Banks, Philippine Exporters Confederation, Inc., Employers Confederation of the Philippines, Philippine Association of Legitimate Service Contractors, Stratbase ADR Institute for Strategic and International Studies, and Philippine Food Processors and Exporters Organization, Inc. The letter was signed by Revin Mikhael D. Ochave and Justine Irish D. Tabile.