MICROCAPITAL BRIEF: Philippines’ Securities and Exchange Commission (SEC) to Establish Microfinance NGO Regulatory Council

The Philippine Senate has recently passed Senate Bill 2752, also called the Microfinance NGOs Act, which directs the Securities and Exchange Commission (SEC), an agency of the Philippine government regulating the securities market in an effort to promote economic efficiency, to establish the Microfinance Non-Governmental Organization (NGO) Regulatory Council. [1] The Council will be responsible for managing the registration, licensing and issuing of accreditation certificates for microfinance NGOs; monitoring their performance; suspending their accreditation certificates in cases of adverse judgment; collecting regular reports of their activities; collecting reasonable fees for their accreditation and monitoring; and submitting annual reports to Congress and the President of the Philippines. [2]

The bill also decrees that accredited microfinance NGOs “shall not be subjected to any government taxes and fees imposed under the Internal Revenue Laws and other tax laws,” and that donations to microfinance NGOs “shall be fully deductible from the gross income of the donor” and “exempt from donor’s tax” subject to certain qualifications. [2]

Senator Paolo Benigno “Bam” A. Aquino IV, the bill’s sponsor and Chair of the Philippine Senate Committee on Trade, Commerce and Entrepreneurship, stated that this official recognition of microfinance NGOs that have previously been “helping the government’s poverty alleviation program without getting anything in return,” will further enable “the poor to build their own businesses and create their own sustainable livelihood.” [1]

By Hye In Arielle Oh, Research Associate

About Securities and Exchange Commission (SEC) of the Philippines

The Securities and Exchange Commission (SEC) of the Philippines was established on October 26, 1936, by the Commonwealth Act Number 83, which is also known as the Securities Act, to regulate the securities market in an effort to promote economic efficiency. Its duties include supervising all corporations and partnerships within the Philippines; formulating policy recommendations concerning the securities market; regulating, investigating and monitoring the activities of exchanges, clearing agencies and other self-regulatory organizations (SROs); and formulating the rules, regulations and orders that these actors must keep as well as the sanctions to be levied against violators of these rules.

Sources and Additional Resources:

[1] BusinessWorld Online: “Bill creates microfinance regulator,” http://bworldonline.com/content.php?section=Nation&title=bill-creates-microfinance-regulator&id=113188

[2] Sixteenth Congress of the Republic of the Philippines: “Senate Bill No. 2752,” http://www.senate.gov.ph/lisdata/2119618046!.pdf

Republic of the Philippines Securities and Exchange Commission: “Mandates, Powers and Functions of the SEC,” http://www.sec.gov.ph/aboutsec/powerandfunction.html

MicroCapital Universe Profile, “Securities and Exchange Commission of the Philippines,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Securities+and+Exchange+Commission+%28Philippines%29

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