SEC urges SMEs to tap capital market for funding requirements

The country’s corporate watchdog is trying to convince the small and medium enterprises (SMEs) not to shy away from the capital market despite concerns of the fussy process in terms of securing regulatory approvals.

The Securities and Exchange Commission (SEC), in a statement, urged SMEs to tap the capital market for more funds, a development that could improve not only the country’s capital market but also the economy in general.

SEC said it believes that SMEs play a crucial role in the country's economic progress and need the support of government agencies like it which is mandated to develop and regulate the corporate and capital markets.

“SMEs can always count on the SEC's commitment to support them as they pursue their lofty business goals which ultimately contribute to the furtherance of the country's economic growth,” the Commission said.

“The SEC is well aware of SMEs' limitations in accessing capital for their business growth… The SEC is actively engaged in encouraging SMEs to examine their financing options by considering tapping the capital markets,” it added.

According to the Commission, there’s now a bullish trading of SME securities in the country, while a lot more is underway.

As of now, several SMEs already filed their applications to the SEC for their planned initial public offerings (IPOs) at the Philippine Stock Exchange (PSE).

The SEC just recently approved the registration statement of Philstocks Financial, Inc. for its IPO covering 98.8 million shares for primary offering, and 275 million issued and outstanding shares.

The maximum offer price is at 1.88 per share for a maximum issue value of 185.89 million. Philstocks Financial Inc. is the first broker dealer to tap the capital market.

In October, 2015, the Commission also gave its green light to real estate developer Italpinas Development Corporation's 242-million IPO.

Under review by the SEC is the IPO application of Philippine Primark Properties, Inc., which intends to register 704.46 million for primary offering at the PSE and 2.01 billion issued and outstanding shares. The maximum offer price is fixed at 1.7 per share for a maximum issue value of 1.69 billion.

In 2014, three SMEs raised funds via IPO.

Aside from Philippine Primark, there are also other companies, most of which are SMEs, who are hoping to get SEC approval within the year.

The remaining IPOs that are yet to secure the approval of the SEC are the newly filed 1.51-billion IPO application of TVI Resource Development Philippines, Inc. (TVIRD); Pointwest Technologies Corp. ( 2.86 billion); Gweilo Corp. ( 95-million); and Green Power Panay Philippines, Inc. ( 290 million).

Gweilo Corp., who already got an approval from the SEC, is still waiting for PSE’s go signal for its 75-million share sale but a source within the SEC says this IPO may already happen next year.