The Securities and Exchange Commission (SEC) is proposing to exempt more corporations—particularly micro enterprises—from the mandatory submission of audited financial statements, in a move to reduce compliance costs and support ease of doing business.
In a policy paper submitted to the Department of Finance (DOF) on October 28, the SEC recommended that corporations with total assets or liabilities not exceeding ₱3 million be allowed to submit annual financial statements certified under oath by their treasurer or chief financial officer, instead of audited financial statements.
If approved, the policy will cover fiscal years ending on or after December 31, 2025. The higher threshold aims to ease regulatory and financial burdens on small businesses by removing the costly audit requirement for those below the ₱3-million mark.
Currently, corporations with total assets or liabilities of at least ₱600,000 are required to submit audited financial statements, as provided under Section 177 of the Revised Corporation Code (Republic Act No. 11232) and Revised Rule 68 of the Securities Regulation Code. Those below this threshold may submit unaudited financial statements certified by their treasurer or CFO.
Under Section 74 of the RCC, the DOF has the authority to determine the threshold for requiring audited financial statements.
“MSMEs are the backbone of the Philippine economy, which is why the SEC remains committed to measures that make the business environment more accessible for our entrepreneurs,” said SEC Chairperson Francis Lim.
He added that the proposed policy “will not only improve the ease of doing business but also eliminate unnecessary compliance requirements for micro entities,” aligning with the government’s push for inclusive economic growth.
The SEC noted that aside from easing costs, the measure would help reduce rubber-stamp audits, simplify registration and reporting, and allow the Commission to focus its supervision on higher-risk corporations.
Despite the relaxed audit rules, the SEC emphasized that it will maintain oversight through its visitorial powers under the RCC, which allow the Commission to order audits when public interest demands.
“We assure the public that this proposal will not weaken regulatory oversight,” Lim said, noting that corporations engaged in public infrastructure or other regulated industries will still be subject to the audit requirement as they generally exceed the ₱3-million threshold.
