The Securities and Exchange Commission (SEC) has exempted firms with capital and liabilities of up to PHP3 million from submitting audited financial statements.

The move aims to streamline processes and reduce the regulatory burden on micro enterprises.

Previously, only firms with total assets and liabilities of less than PHP600,000 were covered by the policy.

“In lieu of audited financial statements, a corporation that does not meet the audit threshold must submit financial statements accompanied by a Statement of Management’s Responsibility (SMR),” the SEC said in a news release Wednesday.

SEC Chairperson Francis Lim said this move “recognizes the realities faced by micro enterprises, which often operate with very limited resources.”

“By allowing the submission of certified financial statements in lieu of audited ones, we are making compliance more proportionate, allowing them to redirect their resources to growing their business,” he said.

Lim said the new rule also “preserves accountability by requiring management to formally assume responsibility for the accuracy and integrity of their financial statements, ensuring that regulatory oversight remain firmly in place.”

SEC said the new rule applies to “financial statements covering fiscal years ending on or after December 31, 2025.”

It said the SMR of stock and non-stock corporations must be sworn to and signed by the board chair, president or chief executive officer, and treasurer or chief financial officer, all duly authorized by the board, while those of one-person corporations must be signed by the president and treasurer.

“The signatories shall assume full responsibility for the accuracy, completeness and truthfulness of the submitted financial statements,” SEC added. (PNA)