Corporate governance in the Philippinesis characterized by concentrated ownership by a limitednumber of family shareholders, within a bank-dominatedfinancial market. A comprehensive set of corporate law andcapital market regulations are enforced by relatively weakinstitutions that are undergoing restructuring reforms. Asin many East Asian countries, the need to strengthencorporate governance was highlighted during the financialcrisis in the region, and recent securities market scandals.This report benchmarks Philippine corporate governanceagainst the OECD Principles of Corporate Governance, whichhave been recognized as one of the core standardsunderpinning the international financial architecture. Assuch, the report focuses primarily on corporate governanceissues affecting listed companies and equity providers.Recommendations on related corporate governance issues suchas banking and the governance of group structures, thoughrelevant to the reform dialogue, are beyond the scope ofthis report. (Two parallel ROSCs are being prepared toassess the Philippines on accounting and auditing, andinsolvency and creditor rights, which will provide greaterdetail on these issues.) The policy recommendations in thisROSC are intended to highlight areas in which the Philippinecorporate governance system could be strengthened. They aregrouped under four main headings: improving the disclosureof non-financial information, strengthening the rights of(minority) shareholders, enhancing the role of the board ofdirectors, and ensuring the independence of the audit.
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