THE Philippine Stock Exchange (PSE) may file before Congress this year its newest market-friendly initiative aimed at getting more firms to go public, said a top official.

In a recent chance interview, PSE president and chief executive officer Francis Lim said the bourse has already completed the first draft of the proposed Stock Market Competitiveness Act.

When approved, the bill will be the latest stock market-oriented measure after the Personal and Equity Retirement Account law, Credit Information System law, Documentary Stamp Tax law and Real Estate Investment Trust bill, which were ratified by Congress.

“I think we can file [the proposed bill] this year, getting a sponsor won’t be a problem,” said Lim.

The bourse chief said the law will strengthen the capital market by encouraging new companies to join the exchange. He said incentives will include exemption from initial public offering (IPO) tax as well as a lower corporate income tax if the firm maintains a certain level of public ownership.

“In our first draft, [for a firm to get these incentive, it should have] at least a 30-percent public float which must be maintained,” he said, adding that a violation if this rule may result in the removal of the company’s tax incentives. He said the exchange is also exploring mandatory dividend declaration.

Lim pointed out that the measure will create a new corporate governance standard. He explained that firms that list adhere to tax and regulatory rules more strictly, relative to unlisted firms.

Citing PSE statistics, Lim said there are about 340,000 companies, of which only 234 are part of the exchange.

“These 234 companies account for 35 percent of corporate income taxes collected annually for the past two years which means they are paying more faithfully if they are listed,” he said. “And not all of them belong to the top 1000 corporations.”

The move is seen to help the exchange grow, given the dearth of firms joining the PSE’s ranks in 2009 largely due to the effects of the  global financial crisis.

Since the start of the year, only three firms have joined the exchange, of those only Ripple E-Business International Inc. listed through an IPO. The company raised a little over P20 million from the exercise. The last company to conduct a major IPO was San Miguel Brewery Inc. which raised over P6 billion in May 2008.

Other firms that listed this year by way of introduction are miner Century Peak Metals Holdings Corp. and food company AgriNurture Inc.