The Philippine Securities and Exchange Commission released for second public comment a revised draft memorandum circular that would adopt Philippine Financial Reporting Standards (PFRS) S1 and S2 and issue sustainability reporting guidelines and a roadmap for publicly-listed companies (PLCs) and large non-listed entities (LNLs). The revised draft incorporates stakeholder feedback from the first public exposure conducted in July 2025 and sets out a phased timetable for mandatory sustainability disclosures, related transition reliefs, external assurance expectations, and compliance provisions. Under the draft, PLCs and LNLs that are reporting entities under Section 17.2 of the Securities Regulation Code would submit a Sustainability Report, with PLCs attaching it to the annual report and other covered LNLs submitting it with their audited financial statements. The proposed roadmap would start PFRS S1 and S2 adoption on a tiered basis from fiscal years beginning on or after 1 January 2026, with Tier 1 PLCs (Philippine Stock Exchange-listed with market capitalisation above PHP 50 billion) reporting in 2027, Tier 2 PLCs (PHP 3 billion to PHP 50 billion) reporting in 2028, and Tier 3 entities reporting in 2029, including smaller PLCs, PLCs with debt securities listed solely on the Philippine Dealing & Exchange Corp., and LNLs with annual revenue above PHP 15 billion. Mandatory external limited assurance over Scope 1 and 2 greenhouse gas emissions would apply two years after each tier’s initial implementation, using International Standard on Sustainability Assurance (ISSA) 5000, alongside specified transition reliefs such as time-limited allowances on climate-only disclosures, delayed submission timing, no comparatives, temporary flexibility on GHG measurement methods, and a two-year deferral for Scope 3 emissions. Further comments on the revised draft are requested by 30 October 2025. As drafted, the circular would take effect 15 days after publication in two newspapers of general circulation, repeal SEC Memorandum Circular No. 4 (Series of 2019), and be supplemented by later SEC issuances on external assurance rules, LNL penalties, and additional guidance materials.
Philippine Securities and Exchange Commission2025-10-24
Philippine Securities and Exchange Commission seeks second-round comments on draft sustainability reporting rules adopting PFRS S1 and S2
The Philippine SEC has issued a revised draft memorandum for public comment, proposing the adoption of Philippine Financial Reporting Standards S1 and S2 and sustainability reporting guidelines. It outlines phased mandatory disclosures from 2026, with tiered requirements based on market capitalization and revenue, including external assurance and transition reliefs. The circular would repeal SEC Memorandum Circular No. 4 (Series of 2019) and be supplemented by future SEC issuances.