The Philippine Stock Exchange Inc. (PSE) expects the number of active stock brokerage firms to decline further as the Securities and Exchange Commission (SEC) reviews rules to raise minimum unimpaired paid-up capital requirements, according to regulatory and exchange officials.
The PSE board has proposed a directive requiring trading participants to raise their minimum capital to P50 million by the end of 2027 and P100 million by the end of 2029. Under the proposal, brokers that fail to meet the P100-million requirement by end-2028 would be required to increase their surety bond to P20 million from P12 million.
Brokerage Roster and Capital Changes
PSE President and Chief Executive Officer Ramon S. Monzon stated that the number of active brokers has already dropped from approximately 180 to 121. He indicated that stricter capital thresholds will lead to further closures.
“With this capital increase, I think there will be some more brokers [that] will be stopping their operations,” Monzon said in an interview with Bloomberg TV. “Yes, I think it would be a good thing, especially for risk management purposes.”
SEC Chairperson Francis Lim confirmed that the regulator is reviewing existing capital levels, noting that the P100-million threshold set in the 2015 Implementing Rules and Regulations of the Securities Regulation Code may no longer be adequate.
“So the SEC is talking about shortening the runway or increasing it further from P100 million,” Monzon added, noting that the exchange has submitted its proposal to the commission for approval.
PSE Listed Companies Lag Regional Peers
The regulatory review coincides with efforts by the SEC to expand the number of listed companies on the exchange, which stood at 279 as of Aug. 31, 2026. Data shows the local bourse lags behind regional neighbors, including Vietnam with 405 listed firms, Singapore with 604, Thailand with 867, and Indonesia with 962.
The Philippines recorded zero initial public offerings (IPOs) through August 2026, while other Southeast Asian exchanges registered between three and 43 offerings. Three local share sales are expected later this year, led by GCash parent Mynt Inc.’s P92.3 billion offering, VitroREIT’s P24.2 billion deal, and Aznar Shipping Corp.’s P737 million IPO.
“Our goal is not to keep every company listed. Our goal is to make staying listed worthwhile,” Lim said at a recent forum. “Investors put their money where disclosures can be trusted, prices can be relied upon, and those who abuse the market know they will be held accountable.”
Industry Analysts Weigh Market Impact
Market analysts noted that higher capital thresholds could drive operational consolidation, though it may also burden smaller firms operating under thin trading volumes.
“A higher minimum capital requirement would likely accelerate consolidation in the Philippine stockbroking industry,” Globalinks Securities and Stocks Inc. Head of Sales Trading Toby Allan C. Arce said. “Raising the threshold may remove financially weaker participants, but it cannot substitute for effective supervision, internal controls and enforcement.”
Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco noted that higher requirements could burden smaller brokerages. “Raising the minimum capital requirement would also be an additional burden to the brokers who are already challenged by the present market conditions wherein trading is tepid,” Tantiangco said.
BDO Securities Corp. President John Tristan D. Reyes added that consolidation could lead to stronger market intermediaries. “This can help boost investor confidence as investors would be dealing with more stable companies that are able to manage risks and protect clients,” Reyes said.
This article is published on BitPinas: SEC Pushes for IPOs as PSE Roster Lags Regional Peers
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