Corporate Governance in the Philippines

 Long before the collapse of Enron and WorldCom, the Philippines had its share of corporate
scandals such as BW Resources Corporation, whose prices reached high prices and then fell in 1999.
(Trade Chakra, 2008)
 In 1997, corporate management failed in five Asian countries, including the Philippines. Managing
shareholders have abused the resources of all shareholders through their poor investment decisions and
risky decisions. The corporate governance framework was weak and until early warning signs did not
produce measures to challenge bad management decisions. (Sumalinog, 2014)
 Accordingly, the regulation of the Philippine Securities and Exchange Commission promotes
corporate governance reforms that will help increase investor confidence create a more capital market,
and boost business and economic growth. The code applies to:
1. Registered or registered companies,
2. Licensing companies and second franchises from the Commission,
3. Public companies
4. Branches or companies affiliated with foreign organizations operating in the Philippines
where their securities are registered or listed.

Salient Features, Structure and Standards of Corporate Governance in the Philippines

 Once a leader has created a code of conduct and a code of ethics, they must adhere to it, and
the entire organization must be able to observe the code while promoting the key features of good
corporate governance. Discipline is the awareness and commitment to the basic principles of good
governance in a company, especially at the senior management level. It can take years for a company's
management to develop a strategy to push into new markets, but if it does not mobilize its workforce to
implement that strategy, the initiative will fail. Organizational transparency helps unite an organization.
When employees understand management strategies and allow them to monitor the company's financial
performance, they understand their role within the company. Incorporating investor confidence and
confidence, developing a capital market, and actively promoting corporate governance reforms that will
help the corporate sector and the Philippine economy achieve sustainable growth, the Securities
Exchange and Commission in its Resolution No. 135, Series of 2002, dated April 04 2002, approve the
promulgation and implementation of the Code of Corporate Governance, Memorandum Circular No. 6
Series of 2009, referred to as the revised code of corporate governance. (Trade Chakra, 2008)

Improvement in Corporate Governance in the Philippines

 The Securities and Exchange Commission has issued a new corporate governance code to
publicly listed companies that include laws that limit the nine-year term of independent directors, authorize
the protection of perpetrators and introduce anti-corruption measures. The new code, which came into
effect on January 1, 2017, aims to improve board performance, strengthen shareholder protection and
promote full disclosure in financial and non-financial reporting. (Dumlao-Abadilla, 2017)
 The new code will increase board obligations and ensure the strength and commitment of its
directors. Companies are not required to comply fully with the code, but must state in their annual
corporate governance reports whether they comply with the provisions of the code and identify any areas
of non-compliance and explain the reasons for non-compliance. "This new code aims to raise corporate
governance standards in publicly listed companies in the Philippines to the same level as its regional and
international partners," said Teresita J. Herbosa, chairman of the Securities and Exchange Commission.
Encourage companies to implement effective and efficient governance, “said Jane Yuan Xu, IFC
Philippines Country Manager. Under the code, the directors of any company listed publicly must serve for
a period of nine years, after which the independent director must be barred from being re-elected. The
Board is committed to "setting the stage for anti-corruption measures through its policy and program in its
conduct". In 2017, a new Code of Corporate Governance was enacted. Includes revised regulations for
companies listed on the Philippines Stock Exchange, improved regulatory board responsibilities,
proposals to keep independent directors to make more decisions, and improve disaster risk management
activities. The Corporate Governance Code operates under "Compliance or Definition" and includes
voluntary compliance and mandatory disclosure. (International FInancial Corporation, n.d.)