The Philippine Securities and Exchange Commission released for public comment a draft memorandum circular that would adopt Philippine Financial Reporting Standards (PFRS) S1 and S2 and issue Sustainability Reporting Guidelines and an adoption roadmap for publicly-listed companies (PLCs) and large non-listed entities (LNLs). The proposal expands sustainability reporting requirements to cover LNLs and sets a tiered, phased approach to mandatory reporting and limited assurance. Under the draft, PLCs and in-scope LNLs would file a Sustainability Report (as an attachment to the annual report for entities reporting under Section 17.2 of the Securities Regulation Code, or together with audited financial statements for other LNLs) and have it reviewed and approved by the board. From effectivity until fiscal year 2025, reports could follow any internationally recognised framework, with PFRS S1 and S2 becoming mandatory from fiscal year 2026 on a tiered schedule: Tier 1 PLCs with market capitalisation above PHP 50 billion (fiscal years beginning on or after 1 January 2026), Tier 2 PLCs with market capitalisation above PHP 3 billion up to PHP 50 billion (from 1 January 2027), and Tier 3 PLCs with market capitalisation of PHP 3 billion or less and LNLs with annual revenue above PHP 15 billion (from 1 January 2028). Mandatory limited assurance over Scope 1 and 2 greenhouse gas emissions would apply two years after each tier’s initial implementation, with additional SEC rules on assurance to follow. The draft also sets transition reliefs (including temporary climate-only reporting, delayed report timing, no comparatives, limited flexibility on GHG methods, and a deferral for Scope 3) and an exemption for an LNL whose parent already prepares the prescribed disclosures in the Philippines and includes the LNL in that report; it links PLC non-attachment to existing annual report penalty frameworks and notes that LNL penalties would be addressed in subsequent issuances. Comments are requested by 15 August 2025 via the SEC’s submission link. The draft circular would take effect 15 days after publication in two newspapers of general circulation.
Philippine Securities and Exchange Commission 2025-07-30
Philippine Securities and Exchange Commission consults on adopting PFRS S1 and S2 sustainability disclosure standards with phased rollout for listed companies and large non-listed entities
The Philippine Securities and Exchange Commission has released a draft memorandum for public comment, proposing the adoption of Philippine Financial Reporting Standards S1 and S2, and Sustainability Reporting Guidelines for publicly-listed companies and large non-listed entities. It introduces phased mandatory sustainability reporting based on market capitalisation and revenue, with mandatory limited assurance over Scope 1 and 2 greenhouse gas emissions. Transition reliefs and exemptions are outlined, with full compliance required by fiscal year 2028.