Changes, Opportunities, and Challenges

The year 2000 saw the rapid changes in the global economic environment, as technology continued to produce innovations and world attention was focused on various issues arising from the dismantling of trade barriers, which culminated at the December 1999 WTO Ministerial Conference, in Seattle.

The Philippines responded and proceeded to deal with the changes by drawing and instituting a package of reforms to improve its economic climate and make it attractive to investors.

For the Philippine Securities and Exchange Commission, the first quarter of 2000 saw the changing of the guard with the appointment of Ms. Lilia R. Bautista, as Chairperson, to serve the remainder of the term of office of Mr. Perfecto R. Yasay, who resigned.  The move was intended to shore up investor confidence, badly eroded by the 1999 BW stock scandal, which, together with the consequent government investigation process, was intensely covered by the news media.  Moreover, the expiration of the terms of the office of two (2) Commissioners in the second and third quarters, raised another opportunity for leadership change in the SEC.  The June, 2000 appointment of Commissioner Joselia J. Poblador provided the SEC with the fourth of the five Commissioners (including the Chairperson) prescribed by law.  While the fifth Commissioner’s position remained vacant, these two (2) new appointments gave a balance in the Commission en banc composition, namely:  Commissioners Fe Eloisa C. Gloria and Edijer A. Martinez, both long-serving career persons from within the organization, providing continuity; while the other two (2) namely: Chairman Bautista and Commissioner Poblador, both having nurtured successful careers in their respective fields, providing new perspectives in the development of the Philippine capital market.

Changes were likewise instituted in other areas of the government such as the Department of Finance, and the Department of Trade and Industry, to further improve the Philippine business environment.

The Legislature, complementing the reforms in the Executive Branch and taking into account the growing confidence in the new leadership at the SEC, worked in earnest to enact in July 2000, R. A. 8799 otherwise known as “The Securities Regulation Code” or the SRC.

Section 2 of SRC expresses the new state policy, thus:

“The State shall establish a socially conscious, free market that regulates itself, encourage the widest participation of ownership in enterprises, enhance the democratization of wealth, promote the development of the capital market, protect investors, ensure full and fair disclosure about securities, minimize if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market.”

 The salient provisions of the SRC, among others, are those:

• Strengthening the regulatory functions over all entities dealing in securities.

• Defining, in clear terms, fraud and other criminal offenses and increasing the penalties for offenses related to securities

• Authorizing and funding the reorganization of the SEC to ensure the attainment of the goals of the SRC

• Transferring some quasi-judicial functions to the regional trial courts.

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