Philippine Securities and Exchange Commission exempts micro enterprises with up to PHP 3 million in assets or liabilities from audited financial statements

The Philippine Securities and Exchange Commission issued amendments to Revised Securities Regulation Code Rule 68 that raise the audit threshold and allow micro enterprises to meet reportorial requirements without submitting audited financial statements. Under Memorandum Circular No. 4, Series of 2026, stock and nonstock corporations with total assets or liabilities not exceeding PHP 3 million may file certified financial statements in lieu of audited ones, replacing the previous exemption threshold of less than PHP 600,000. Corporations that do not meet the audit threshold must submit financial statements with a sworn Statement of Management’s Responsibility signed by specified officers, who assume full responsibility for the accuracy and completeness of the submissions; incomplete, inaccurate, false, or misleading statements may trigger penalties under the Securities Regulation Code and the Revised Corporation Code, and the SEC retains the power to require audited financial statements when needed for investor protection, regulatory enforcement, or public interest. The new threshold does not apply to entities in Groups A, B, and C under the rule and other corporations treated as vested with public interest. The higher threshold applies to financial statements covering fiscal years ending on or after December 31, 2025, while corporations with earlier fiscal year-ends apply the threshold in effect at the close of their fiscal year.