SEC creates office to help SMEs tap capital markets

The Securities and Exchange Commission (SEC) has created an office which will help small and medium enterprises (SMEs) raise funds through various modes being employed by large companies.

SEC Chairman Emilio B. Aquino said the agency is encouraging more SMEs to go public. The agency hopes to provide the necessary assistance they need to reach their goal by establishing the Office for the Advancement of Strategic Investments in SMEs (OASIS).

“[It is] an OASIS not to draw water from, but capital, and certainly not watered stocks. The formation of OASIS is dedicated to promoting the interests of SMEs,” Aquino said during an online forum organized by the Philippine Stock Exchange (PSE).

Aquino said OASIS will help, among others, set up the capital market as a viable alternative to raising capital for SMEs, simplify the capital-raising products and streamline the registration processes for SMEs and encourage the investment houses and other financial institutions to conceive and implement an SME-friendly underwriting and advisory program.

It hopes to engage with multilateral agencies, such as the Asian Development Bank and International Finance Corp. of the World Bank, in launching SME-focused investment funds. It also aims to collaborate with the other agencies and the private sector in developing the appropriate ecosystem for SMEs, both developmental and regulatory.

“We challenge ourselves that by the time we celebrate our 88th year anniversary on November 11, 2024, at least 888 companies would have already tapped the capital market for their capital-raising activities,” Aquino said.

Some 99 percent of the total business enterprises operating in the country as of 2020 are SMEs, and these firms generated 62 percent of the country’s total employment.

“This prolonged pandemic made it more difficult for MSMEs [micro, small and medium enterprises] to raise funds from formal financial institutions and to survive the crisis. Although, the sector’s ability to access finance faces constraints even during non-crisis periods,” Aquino said.

“As some areas are moving to the recovery stage, MSMEs continue to confront a sharp drop in demand and revenue as we deal with the continuing threats of Covid-19.”

The PSE last week held an online forum to discuss with the SMEs the process of going public.

“We are pleased to see keen interest from business owners in the provinces. It is important for us to impart that capital raising in the PSE is not exclusive for big and established firms or for businesses based in Metro Manila. The stock market is open to SME companies who need capital to take the next step in growing their business,” PSE President and CEO Ramon S. Monzon said.

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