DAVAO CITY — Local businesses, especially family enterprises, have been urged to clean up their books and professionalize operations to open more windows to capital funding, an official of a consulting and accounting company said.
Emiliano S. Librea III, partner and head of advisory services of Punongbayan and Araullo, the Philippine member of Grant Thorton International Ltd., said good management practices will allow small and medium enterprises to access financing, including public investment by listing in the Philippine Stock Exchange.
Mr. Librea cited the case of Davao-headquartered Phoenix Petroleum Philippines, Inc., which listed in 2007 and has since grown its capital to about P15.7 billion from less than P2 billion.
“Imagine that, that is how huge the jump in its market capital,” Mr. Librea told BusinessWorld on the sidelines of a briefing for local companies last week.
The briefing, held together with the consultancy firm’s partners, Uni-Capital and the Martinez Vergara Gutierrez and Serrano law firm, included discussions on the benefits and requirement of listing in the stock market.
Mr. Librea said some companies, especially those run by families, pay for personal expenses out of company funds, which affects real valuation.
These “skeletons in the closet,” he said, are also means to lower tax due.
“They either do not have books or they don’t depict the true state of the business,” he said.
Mr. Librea also said that even without considering the stock market or borrowing from financial institutions, it would do companies good to put their accounting and operations in order to have better chances for growth.
“Hopefully, (they implement) the changes in the management of their businesses especially with the new generation,” he said. — Carmelito Q. Francisco
