Beneficial ownership transparency in the Philippines

  • Publication date: 22 April 2024
  • Authors: Emily Manuel, Maria Karla Espinosa

3. Conclusion

Based on the OO Principles, this scoping assessment is an initial step for identifying technical gaps and areas of concern to inform the design and planning of a sound BOT system appropriate for the Philippines, and could help determine priorities for action. This assessment generated the following important observations:

  • The definition of BO is not in primary legislation.
  • The BOD form does not allow for further detail where BO is held indirectly or ownership/control is exercised informally.
  • BO data is not being collated in a central register and does not appear to be structured and interoperable (although the PH-EITI operates a provisional BO register for the extractive industry).
  • There is no general public access to BO data even if there is no legal obstacle to publishing certain BO information.
  • There is a lack of an adequate verification system or mechanism to increase the level of assurance on collated BO data.

Addressing these issues will require certain levels of policy reforms as well as enhancement of the information system where BO data is collected and maintained. Amendments to current administrative rules and regulations or the issuance of new ones can be done in the short term, while legislative proposals to Congress can be done over the medium term. System improvements can be done programmatically.

The SEC is front and centre in the BOT agenda, as it performs its mandates as corporate regulator, company register and supervising authority under the AMLA. The SEC can forthwith integrate more structural BO aspects in its ongoing efforts to comply with the FATF Recommendations. It should take steps to allocate financial resources for progressively upgrading its IT infrastructure, as well as building relevant personnel and stakeholder capacities for key functions, such as data verification. As the SEC carries out its digitalisation plans, it should ensure that comprehensive information on SEC-registered entities – including their BO data – will be more systematically collated and made accessible in machine-readable formats compliant with data protection principles, as well as made accessible to LEAs and competent authorities through data-sharing and interoperability. It could also consider how this system may accommodate an expansion of the scope of coverage of corporate vehicles to include, for example, trusts and other legal arrangements.

In parallel, PH-EITI could continue supporting the SEC by ensuring that extractive companies comply with EITI Requirement 2.5. It could maintain public access to its PH-EITI BO registry in the interim, and discuss with the SEC ways of embedding EITI Requirements for regular BO reporting obligations of extractive companies and ensuring BO information is verified.

In the medium term, the SEC could amend or supplement MC 15 to enhance the BOD form to provide space for the disclosure of PEPs and further information where BO is held indirectly. This would also support the country’s compliance with EITI Requirement 2.5. To ensure comprehensiveness of BO data collection for extractives, it is likewise recommended that an enabling legal environment for the public disclosure of BO information specific to extractives be maintained by legislative enactment of an EITI bill and/or by executive policy amendment. This will encourage reporting of BO data from other sectors, such as non-metallic mining, small-scale mining and oil and gas. A policy setting forth guidelines on the use of BO data as part of evaluating licenses and contracts for extractives and enhancement of inter-agency cooperation will also help ensure BO data-sharing and use across key agencies.

In the longer term, the Philippines should consider enacting an omnibus statute on BOT that will:

  • Provide a single, robust definition of BO to be applied across all applicable secondary legislation
  • Set out principles for BO disclosure that ensure a strong legal basis for data collection, storage and publication
  • Expressly allow public access to certain BO information within the bounds of the law
  • Effectively expand the coverage of the current BO disclosure regime to all types of legal entities, legal arrangements and other corporate vehicles. 

Next page: 4. Appendices