IN HIS KEYNOTE ADDRESS during BusinessWorld Insights Stock Market Outlook 2026, Securities and Exchange Commission (SEC) Chairperson Francis Ed. Lim highlighted the SEC’s efforts to boost capital market access and to regain the trust of investors. The forum, held at Lanson Place Mall of Asia on Monday, gathered experts to share their market assessments and stock picks for the year. — PHILIPPINE STAR/RUSSELL PALMA

GOOD GOVERNANCE is key to capital market growth and retaining investor confidence, the Securities and Exchange Commission (SEC) said on Monday, as the Philippines faces local and external headwinds this year.

In his keynote address during BusinessWorld Insights Stock Market Outlook 2026, SEC Chairperson Francis Ed. Lim said external risks such as rising global interest rates, geopolitical tensions and commodity shocks may shake markets, but governance will determine if investor confidence is fleeting or endures.

“We cannot control the headlines. What we can control is what capital ultimately prices in. Clear rules, predictable timelines, and firm enforcement,” he said.

For 2026, Mr. Lim said the true test for the capital markets is if confidence remains when conditions turn.

“On governance dividend, the test for 2026 is not whether the market can rally. It is whether confidence can stay when conditions change,” Mr. Lim said.

If governance dividends hold, Mr. Lim said valuations will follow because investors have the trust in the market.

“The most credible bull case is a market where confidence compounds. Your SEC will continue tightening execution, removing unnecessary friction, and enforcing the law to retain investor confidence,” he said.

“Because in the end, governance is not an accessory to growth. It is its foundation.”

A corruption scandal over anomalous flood control projects last year has dampened investor and consumer sentiment and contributed to slower economic growth, household consumption and public spending.

The Philippine Stock Exchange index (PSEi) slumped last year as the flood control mess dampened investor confidence. The PSEi closed at 6,052.92 on Dec. 29 — the last trading day of 2025 — down by 7.29% or 475.87 points from its end-2024 finish of 6,528.79.

The PSEi has since bounced back, closed at 6,448.51 on Monday, up 0.36% from Friday’s close.

Mr. Lim said the SEC’s mandate is to make the capital markets “easier to access, easier to comply with, and easier to trust.”

So far, the SEC has implemented reforms to improve the ease of doing business, focusing on firm timelines, and reduced costs.

“We, for example, expanded our One-Day Submission and Electronic Registration of Companies (OneSEC), our online incorporation of registered assistance for companies, from 33 to 81 industries. What used to take a week or more for incorporating a new company can now be done in under half a day, even as fast as two hours for complete applications,” Mr. Lim said.

In September last year, the SEC expanded its OneSEC Zuper Easy Registration Online facility to let companies with foreign equity register in the Philippines in just one day as part of efforts to further streamline the registration process.

“We reduced costs and matched requirements to risk. We extended the MSME (micro, small and medium enterprises) discounts to 20% of corporate registration and 50% of securities filing. As of December 2025, over 15,000 of our SMEs saved more than P34 million, money that we were able to redeploy to payroll, inventory, and expansion,” Mr. Lim said.

“For the SEC, deeper markets require deeper participation, and participation collapses when compliance is priced out of reach,” he added.

Jesus Mariano P. Ocampo, president and chief operating officer of Investment and Capital Corp. of the Philippines, said these reforms are helping lift investor confidence.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said that the SEC reforms would boost the economy by increasing business activity.

However, investors are continuing to closely monitor developments in the corruption scandal, as high level officials and politicians have not been held to account.

“Maybe what they need to see, aside from reforms… are actual politicians going to jail, make a sample out of them, whoever that is,” BDO Securities Corp. President John Tristan D. Reyes said.

“A big name would probably help boost the sentiment, because it would send a message that the government means business, no special treatment, no allies will be spared, let the axe fall wherever they fall. So, that would help restore confidence in the government,” he added. — AGCM

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