The Philippine Securities and Exchange Commission has submitted a policy paper to the Department of Finance recommending that corporations with total assets or liabilities not exceeding PHP 3 million be allowed to file annual financial statements certified under oath by their treasurer or chief financial officer instead of audited financial statements. The proposal would apply to financial statements for fiscal years ending on or after 31 December 2025, subject to final Department of Finance approval. Currently, corporations with total assets or liabilities of at least PHP 600,000 must submit annual financial statements audited by an independent certified public accountant under Section 177 of the Revised Corporation Code, with the threshold reiterated in Revised Rule 68 of the Securities Regulation Code implementing rules. The SEC highlighted anticipated reductions in compliance costs and “rubber-stamp” audits, lower barriers to registration, and a shift of supervisory focus toward higher-risk entities, while noting it would retain oversight through its visitorial powers, including the ability to require audits where warranted by public interest. Implementation is contingent on the Department of Finance’s decision, as Section 74 of the Revised Corporation Code recognizes the Department’s authority to set the audit threshold.
Philippine Securities and Exchange Commission 2025-11-03
Philippine Securities and Exchange Commission proposes PHP 3 million threshold to exempt more micro firms from audited financial statements
The Philippine SEC proposes allowing corporations with assets or liabilities under PHP 3 million to file financial statements certified by their treasurer or CFO, instead of audited ones. This aims to reduce compliance costs and focus oversight on higher-risk entities, pending Department of Finance approval. The current threshold for audited statements is PHP 600,000, per the Revised Corporation Code and Securities Regulation Code.