Lowering the Cost of Going Public
It is more IPOs, a broader base of listed companies, deeper participation by retail and institutional investors, and a capital market that finances enterprise and creates jobs.
The OECD’s 2024 Capital Market Review of the Philippines contained a finding that deserves more attention than it has received: listing fees in the country are relatively high, and the fee structure is more complex than in peer countries.
The Securities and Exchange Commission has looked closely at the comparative data. The conclusion is that the finding is valid, and that it calls for action.
Listing in the Philippines involves two layers of cost. The securities regulator charges fees based on offer size, while the exchange charges fees based on market capitalization.
This dual structure is common across the region, and Malaysia, Singapore, Indonesia, Vietnam, and Thailand all follow it. What sets the Philippines apart is that its fees carry no cap.
The exchange side presents a large gap. The Philippine Stock Exchange charges the highest main board initial listing fees in ASEAN. The fee reaches its highest level at a market capitalization of around P6 billion, and 15 of the last 20 IPOs in the country fall within this bracket. The costliest tier is therefore not an exception reserved for the largest issuers. It describes the typical Philippine IPO.
Furthermore, the Philippines has the highest combined regulator and exchange initial listing cost at larger issuer sizes. This is driven largely by the PSE main board fees. Of the combined amount, roughly 90 percent goes to the exchange and about 10 percent to the SEC. The SEC’s smaller share does not excuse it from acting first. Its own schedule is the one it controls, and reform is more credible when it starts at home.
The direction of reform follows from the evidence. The SEC’s fees should be reviewed to bring them in line with, and ideally below, regional peers, with particular attention to offers under US$30 million.
A cap on fees, now absent, should be seriously considered so that larger issuers face predictable and bounded costs. The overall structure should also be simplified, so that a company weighing an IPO can understand its total cost without a team of advisers.
Finally, the SEC and the PSE should undertake a joint review, because the regulator’s fees alone cannot resolve a problem that is mostly located on the exchange side.
This is not an argument against sustaining the institutions that regulate and operate the market.
Fair fees fund oversight and market infrastructure. The argument is about proportion and competitiveness. When listing costs more in Manila than in Singapore, Kuala Lumpur, Jakarta, Bangkok, or Ho Chi Minh City, promising companies have reasons to stay private or list elsewhere, and Filipino investors are left with a thinner market.
The measure of success is not a lower fee schedule in itself. It is more IPOs, a broader base of listed companies, deeper participation by retail and institutional investors, and a capital market that finances enterprise and creates jobs.
The OECD has identified the problem, and the data confirms it. What remains is the will to fix it, and the SEC intends to do its part.