The Philippine Securities and Exchange Commission has published an exposure draft Memorandum Circular and requested comments on proposed rules for the duration of term and term limit of independent directors for publicly listed companies, public companies, and registered issuers. The draft would require independent directors to be elected to fixed three-year terms and would apply a maximum cumulative term limit of nine years. The proposal would stagger independent director term expiries so they do not fall in the same year, except where a board has more than three independent directors, using initial terms of three, two, and/or one year to establish a rolling cycle. The nine-year cap would be reckoned from 2012, with any fraction of a year counted as a full year, and covered companies would have to disclose in their Preliminary and Definitive Information Statement (SEC Form 20-IS) any nominees who would breach the maximum term within the three-year term. An independent director who has served the maximum term would be disqualified from serving as an independent director in the same company, would have to vacate immediately upon disqualification, and could remain eligible for election as a non-independent director. Proposed penalties include PHP 1,000,000 for non-adoption of the independent director term requirement, and PHP 1,000,000 for breach of the term limit plus PHP 100,000 per month for failure to vacate upon disqualification. Written comments must be submitted via G-Form by 15 October 2025. The draft states it would take effect on 01 January 2026 after publication in two newspapers of general and national circulation, with a transitory provision allowing incumbent independent directors who have already served the maximum term at effectivity to continue until the company’s annual stockholders meeting in 2026.

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