The Philippines’ Securities and Exchange Commission has raised the penalties for companies that fail to submit their corporate reports within the deadlines set by the regulator.

In a statement announcing the new rules, the SEC says it decided to revise the fines and penalties after it implemented an extensive amnesty programme.

“The higher fines and penalties come after the implementation of the SEC Amnesty Programme, which gave corporations a chance to settle the fines and penalties they have accumulated for non-compliance with reportorial requirements at a lower cost,” the regulator says. 

This is the first time the SEC has revised its fines and penalties in over two decades. 

Under the new rules, which took effect on April 1, one-person corporations ( OPCs ) and domestic stock and non-stock corporations with retained earnings of more than 100,000 pesos ( US$1,768 ) will be slapped a basic penalty of 5,000 pesos for the late filing of their general information sheet or annual financial statements, with an additional 1,000 peso fine for each month that the documents are not submitted.

In the same memorandum, the SEC says OPCs, domestic stock and non-stock corporations with retained earnings and fund balance or equity of not more than 100,000 pesos will incur a basic penalty of 10,000 pesos, with an additional 1,000 pesos for every month of continuing violation.

Foreign companies

Foreign stock corporations with an accumulated income, fund balance or members’ equity of less than 100,000 pesos will be fined 10,000 pesos and a 6,000 peso late penalty if their report is filed within 30 days of the prescribed deadline. If their reports are filed after 60 days, the penalty will be 12,000 pesos.

Foreign non-stock corporations with less than 100,000 pesos in accumulated income, fund balance or members’ equity that submit their reports late will have to pay a 5,000 peso fine, plus a 6,000 penalty if reports are filed within 30 days of the deadline, and 12,000 pesos if filed within 60 days.

For foreign stock and non-stock corporations with an accumulated income, fund balance or members’ equity of less than 100,000 pesos, late filing will result in a fine of 10,000 pesos, and a 12,000 peso penalty, the SEC says.

For OPCs as well as stock and non-stock domestic corporations, a submission is considered late if the report is filed after the due date, but within the year of the prescribed deadline. 

Meanwhile, for stock and non-stock foreign corporations, a late filing of its general information sheet is defined as a report submitted after 30 days from the anniversary date of the issuance of the corporation’s SEC licence. 

The regulator is doubling the penalty for the violation of Memorandum Circular No. 28, series of 2020, which requires corporations, partnerships, associations and individuals to create an e-mail address and designate a cellphone number for transactions with the SEC.

Previously, the penalty was set at 10,000 pesos. Under the new rules, violators will be levied with a 20,000 peso fine should they fail to present the required information to the SEC.