The Securities and Exchange Commission (SEC) has lowered the minimum threshold for initial public offerings (IPOs) to further incentivize more companies to go public in the local equity market.

Formalized under Memorandum Circular (MC) No. 11, Series of 2026, the move marks the SEC’s most aggressive effort yet to attract more businesses to the local bourse by easing the equity dilution typically required to go public. The change is highlighted by a significant reduction in the public ownership requirement for IPOs to as low as 12 percent.

“The relatively low number of IPOs in recent years, together with emerging constraints in the domestic market’s absorptive capacity for large offerings, reflected in shifts in liquidity conditions, investor allocation patterns, and prevailing risk appetites, underscores the need to review and recalibrate minimum public ownership requirements to ensure that issuance thresholds are responsive to current market realities,” the SEC said.

The circular makes IPO rules more flexible, especially for large corporations, allowing founders to retain more control while still accessing public capital.

Under the MC, the SEC created a tiered public float system — the portion of shares of a corporation that are in the hands of public investors — so larger companies can list with a smaller percentage of shares sold to the public, while smaller companies must sell a higher percentage. While the lower tiers of companies’ market capitalizations remain essentially unchanged, firms with a market cap of P50 billion or more now need only a 15 percent public float, down from the previous 20 percent requirement.

The change may encourage more listings from large technology firms, infrastructure companies, and conglomerates, potentially increasing capital formation and improving the competitiveness of the Philippine capital market while preserving transparency and market liquidity.

For companies worth P200 billion or more, the SEC may permit an even lower public float of as little as 12 percent if liquidity will not be harmed, investor protection is maintained, and orderly trading is ensured, subject to discretionary, case-by-case approval by regulators.

Upon listing, companies with market capitalizations of P50 billion or less must maintain a minimum public float of 20 percent, while those exceeding P50 billion must maintain at least 15 percent publicly traded shares. The SEC will grant a six-month moratorium for companies to meet the threshold should they fail to do so.

The number of IPOs reached a five-year low in 2025, with only Cebuano fuel distributor Top Line Development Corp. and MVP-backed Maynilad Water Services, Inc. going public last year amid souring investor sentiment due to governance issues and the economic downturn.

Reports of e-wallet GCash going public in July circulated as early as May 2025. However, the company opted against it, citing market conditions at the time. Two weeks after GCash’s IPO plans fell through, the President flagged over P500 billion in anomalous flood control projects — marking the beginning of the second half of 2025’s economic backslide.

Philippine Stock Exchange President Ramon S. Monzon previously said the local bourse is targeting four IPOs this year. With the benchmark PSEi falling behind its regional peers, Monzon said justice is needed to restore investor confidence and get the market back on track.

“If nobody goes to jail, nothing will change,” Monzon said. “All we can do as the Exchange is to provide the means. We cannot dictate confidence, we cannot dictate trust.”

As of today, the PSEi has improved by 8.56 percent to 6,619.87 from last year’s 12-year low.