2001年-世界发展银行全球_Corporate_Governance_Country_Assessment___Republic_of_the_Philippines_56页_433kb

Corporate Governance Assessment of the Philippines (September 2001)

Core Content

This report provides an assessment of corporate governance practices in the Philippines, benchmarked against the OECD Principles of Corporate Governance. It is part of the World Bank-IMF joint program on Reports on the Observance of Standards and Codes (ROSC), which aim to strengthen the international financial architecture. The assessment is based on a review of relevant laws and regulations, as well as interviews with key agencies and private sector groups.

Main Points

A. Capital Market Overview

• Market Structure: The Philippines has one stock market, the Philippine Stock Exchange (PSE), with approximately 233,438 active stock corporations, 246 of which are publicly listed.
• Market Capitalization: Listed companies accounted for about 77.5% of GDP, with an average market capitalization of Pesos 10.4 billion (US $206 million).
• Ownership Concentration: The top 10% and 25% of listed companies accounted for 88.6% and 95.9% of market capitalization, respectively.
• Pyramid Structures: Common in the corporate sector, these structures are vulnerable due to the risks associated with the apex company's decisions.
• Financing: The corporate sector relies heavily on internal capital markets, often through ownership of banks, due to limited external financing and high borrowing costs.

B. Shareholder Protections

• Shareholder Rights: Under the Corporation Code, shareholders have the right to elect, remove, and replace directors, and to obtain information about the company.
• Voting Mechanisms: Cumulative voting is mandated for director elections, and minority shareholders are protected against removal without cause.
• Pre-emptive Rights: Shareholders have the right to pre-emptive rights unless waived in the Articles of Incorporation.
• Disclosure Requirements: Listed companies must disclose detailed information about directors and officers, including their shareholdings and dealings with the company.
• Statutory Remedies: Shareholders can initiate legal actions, including class or derivative suits, for wrongful or fraudulent acts by directors.

C. Role of Stakeholders in Corporate Governance

• Legal Rights: Stakeholders' legal rights are protected by the Corporation Code and other regulations.
• Disclosure and Redress: There are mechanisms for disclosure and redress of stakeholders' rights, though minority shareholders are not organized.
• Performance Enhancing Mechanisms: The report suggests the need for better stakeholder participation to enhance corporate performance.

D. Financial and Non-Financial Disclosure

• Material Information: Corporations must disclose material information to the public, including financial and non-financial details.
• Accounting Standards: The Philippines follows both domestic and international accounting standards.
• External Audit: External audit is a requirement for listed companies, and the PSE is in compliance with international settlement guidelines.
• Public Access: Regulators ensure public access to disclosure through the PSE and SEC.

E. Governing Body

• Board Structure: The board of directors has legal duties and key functions, including oversight of management and corporate strategy.
• Director Liability: Directors may face liability for breaches of duty, and there are disclosure requirements related to their roles.
• Board Composition: The PSE is required to increase the number of outside directors under the SRC and has been mandated to de-mutualize by August 2001.

Key Information

• Legal and Regulatory Framework: The Corporation Code and Securities Regulation Code (SRC) are the main legislative instruments governing corporate governance.
• Regulatory Bodies: The Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) are the primary regulators, with the SEC having broader supervisory powers.
• Ownership Disclosure: The SEC and PSE require monthly and quarterly disclosure of shareholdings by principal shareholders, but do not mandate disclosure of ultimate owners.
• Listing Requirements: Companies must meet minimum capital and profitability criteria for listing, with the PSE requiring a "lock-up" period for large shareholders to protect minority shareholders.
• Insider Trading: The SRC defines insiders as those with material non-public information and imposes civil, criminal, and administrative sanctions for insider trading, though there have been no recent prosecutions.

Policy Recommendations

The report outlines policy recommendations under four main categories:

1. Improving Non-Financial Disclosure: Enhance transparency in non-financial information.
2. Strengthening Shareholder Rights: Protect minority shareholders and improve mechanisms for equitable treatment.
3. Enhancing Board Role: Promote the role of the board in corporate governance and ensure better representation of outside directors.
4. Ensuring Audit Independence: Strengthen the independence of the audit function and improve the regulatory framework for auditors.

Conclusion

The Philippines has made progress in corporate governance reforms, driven by both public and private sector initiatives. However, the system remains vulnerable due to concentrated ownership, weak institutional enforcement, and limited shareholder protection mechanisms. The report emphasizes the need for further reforms to align with international standards and improve the governance of listed companies.