Philippines considers lowering IPO public float requirements

The Philippines is considering lowering the minimum public float requirement for companies looking to go public. The current rule requires companies to offer at least 20% of their shares to the public. Officials from the Securities and Exchange Commission mentioned that companies can apply for relief from this requirement. McJill Bryant Fernandez, a commissioner at the SEC, stated that while they want to maintain the 20% float, they understand the need for flexibility. Companies can later increase their public float to meet the requirement. This move aims to encourage more businesses to list on the Philippine stock exchange, which has seen weaker trading and fewer listings compared to other markets in the region. The stock index in the Philippines has dropped nearly 4% this year, contrasting with a 4.5% increase in the MSCI Asia Pacific Index. GCash, a major mobile wallet company, is among those planning an initial public offering. It has asked for a lower public float to reach a valuation of at least $8 billion. PSE President Ramon Monzon noted there has not yet been any IPO in 2025, although they expect three large offerings this year. He highlighted the challenge of attracting companies to the stock market, as many prefer bank loans. GCash, for example, may receive permission to sell only 15% of its shares initially. Monzon also mentioned plans to increase retail investor participation in the market, aiming for 25% to 30% within the next couple of years. Currently, retail investors make up about 19% to 20% of the market. The Philippine stock exchange has started allowing GCash users to invest in stocks directly.