The Philippine Securities and Exchange Commission has proposed replacing its credit rating agency framework with a broader accreditation and supervisory regime covering ratings for corporate bonds, commercial paper, structured products, sukuk, covered bonds, sustainability-linked instruments and other Philippine debt securities. Accreditation would become a substantive assessment of a credit rating agency’s financial resources, governance, personnel, methodologies, operational controls, conflict management and reporting systems, with minimum capital set at PHP 50 million upon accreditation and PHP 70 million three years later. The draft would require majority-independent boards chaired by an independent director, prior approval for key appointments and changes resulting in a new controller, and fit-and-proper assessments for controllers, directors, senior management, analysts and compliance officers. It would also strengthen analyst rotation and independence, separate commercial and analytical functions, establish independent methodology review and internal control arrangements, restrict conflicting ancillary services, and impose expanded regulatory reporting and public disclosures on rating performance, methodologies, governance and rating actions. Proportional alternatives would apply to selected organizational requirements where a credit rating agency’s size makes full separation or dedicated functions impracticable. Comments are due by July 24, 2026. Under the proposed transition, credit rating agencies accredited when the final circular takes effect would have three months to submit compliance plans and 12 months to meet the new requirements.

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