Government suppliers and procurement officials will face stricter scrutiny following a data-sharing agreement between the Securities and Exchange Commission (SEC) and the Procurement Service of the Department of Budget and Management (PS-DBM).

The deal aims to prevent illicit financial flows and conflicts of interest in government contracts by providing real-time access to beneficial ownership data.

With the agreement, PS-DBM can verify the true owners of companies bidding for government projects, reducing the risk of fraud and ensuring a more transparent procurement process.

“Access to beneficial ownership data is critical in achieving the Open Government Principles’ goals,” SEC chairperson Emilio B. Aquino said on Tuesday.

“By ensuring that government agencies, particularly those involved in procurement, have access to comprehensive information on corporate ownership structures, we enhance the ability of public institutions to scrutinize contracts, detect conflicts of interest and prevent illicit financial flows,” he added.

Integrating SEC data into procurement systems

The agreement, signed on 14 March at the SEC headquarters in Makati City with support from the United Nations Office on Drugs and Crime, will integrate SEC data into procurement systems, strengthening due diligence measures and promoting fair competition.

“Access to this data empowers civil society organizations and investigative bodies to track and analyze corporate affiliations in government contracts, ensuring that public funds are allocated transparently and equitably,” Aquino said.

For businesses, this move means greater accountability in bidding processes and compliance requirements.

Accurate disclosure of beneficial owners

Companies must ensure accurate disclosure of their beneficial owners — those who ultimately own or control a corporation — as mandated by SEC Memorandum Circular Nos. 15 (Series of 2019) and 10 (Series of 2022).

False or non-disclosure of beneficial ownership information may result in penalties.

The initiative builds on the Philippines’ exit from the Financial Action Task Force grey list in February and aligns with global best practices in procurement and anti-money laundering efforts.