Philippines’ SEC gives companies five years to comply with foreign ownership rules

The Securities and Exchange Commission (SEC) in the Philippines has decided to give domestic companies that breach the country’s 40% limit on foreign ownership, up to five years to redress the situation – based on new draft rules for Philippine corporations released on Monday. The SEC’s proposed new rules effectively implement the 9 October Supreme Court ruling on the foreign ownership of dominant carrier Philippine Long Distance Telephone Company (PLDT) — a decision which has potential implications for Filipino firms as the country’s High Court has set down specific definitions on how the 60:40 ownership rule (which favours Filipinos) should be calculated. Industry watchers have welcomed the SEC’s move however, saying that the release of the draft rules should provide a measure of confidence to investors.