UK envoy says PSE move to encourage British investors

MANILA, Philippines - British Ambassador Stephen Lillie welcomed yesterday the move of the Philippine Stock Exchange (PSE) to elevate corporate governance standards, saying this will encourage British investors to take another look at opportunities in the country.

Lillie said the PSE Board of Directors’ approval of the publication for public comments of the rules for the Maharlika Board (MB), a voluntary special segment for listed companies subscribing to high governance standards, will help build confidence in Philippine market.

“An effective corporate governance board will help build confidence in the Philippine market. UK investors participated in the consultation process for the Maharlika Board and are very keen to see this project launched soon,” Lillie said. “We hope that the public will take the opportunity to make their comments on the draft rules for the board to ensure that the final rules will be clear, fair, responsive, effective and credible.”

The draft rules are posted on the PSE website for public comments until May 28, 2010. They cover important concerns such as risk management, proxy voting, independent directors and protection of minority shareholders, among others.

Comments will be evaluated and considered for the final draft, which will be submitted to the Board of Directors for approval prior to transmission to the Securities and Exchange Commission (SEC).

The British Embassy supported the PSE’s creation of the Maharlika Board in its bid to build more confidence in the Philippine market by creating a fair, transparent and predictable regulatory business environment in the Philippines. The board will establish in the Philippine Stock Exchange a mechanism that distinguishes and provides incentives to listed companies that elevate their corporate governance practices to international standards.

“As a key emerging economy and one of the largest markets in South East Asia, we believe the Philippines is a good place to do business. Improved corporate governance practices in the country will improve the Philippines’ competitive edge. That’s crucial to boosting economic growth, to provide more jobs for Filipinos,” Lillie added.

The development of the Maharlika Board rules went through a rigorous process of thorough consultation among key stakeholders such as institutional investors (local and international fund managers), issuers (publicly listed corporations), state pension fund (i.e. SSS), brokers, and independent institutions (Institute of Corporate Directors, International Finance Corp., Asian Corporate Governance Association, etc.).