MANILA, Philippines — The Securities and Exchange Commission (SEC) remains optimistic on the crowdfunding industry despite recent setbacks.
“We experienced birth pains,” SEC chairperson Emilio Aquino said.
“That’s the same case for the other jurisdictions like Indonesia and Malaysia. It’s the same. So we’re sorting it out but that does not mean that we’re closing the doors as far as the use of digital platforms are concerned,” he said.
The SEC has been pushing for crowdfunding as an accessible and viable capital-raising option for micro, small and medium enterprises (MSMEs) and startups for their business expansion.
Crowdfunding is a fundraising activity typically conducted by startups and SMEs, where the public can support or fund a business idea through an online platform.
“We want them to tap, especially the digital platforms because the whole idea is that it will allow the SMEs also as source of capital raising opportunities for them,” Aquino said.
There are currently three licensed crowdfunding intermediaries in the Philippines, namely SeedIn Technology Inc., Investree Philippines and Eastern Securities Development Corp.
Investree, the country’s first crowdfunding intermediary and funding platform, however, had announced that it is ceasing operations.
Gotianun-led Filinvest Development Corp. (FDC) last May said its subsidiary f(dev) Digital Innovations and Ventures Inc. and Investree Singapore Pte. Ltd. have approved the winding down of the operations of Investree Philippines.
FDC said Investree Philippines will apply for the shortening of its corporate term up to Sept. 30, 2025.
Investree Philippines started in 2020 with the aim of empowering micro, small and medium enterprises by connecting them with investors who believe in their potential and provides them access to much-needed capital.
The platform has supported over 180 businesses and funded more than 800 applications across various industries as of 2023.
Meanwhile, a special audit on Seedin has been initiated by the SEC after the crowdfunding entity raised the alarm on a possible fraud committed by its former president Edison Tsai.
SeedIn earlier said that Tsai is involved in a possible fraudulent act.
“Most definitely we learn from the reports, the audits that we conduct to plug those possible loopholes. We are checking that. But right now, it’s under review,” Aquino said.
According to the SEC’s rules and regulations governing crowdfunding SMEs no longer have to register securities with or secure approval directly from the SEC before they can solicit investments from the public.