In a local roadshow held at the Cebu Parklane International Hotel earlier this month, the Securities and Exchange Commission (SEC) recently pitched the idea of equity crowdfunding as a convenient option for business start-ups as well as micro, small, and medium-scale enterprises (MSMEs) in the region to raise capital or secure funds for business expansion.
Equity crowdfunding is a financing strategy that involves ownership of an issuing investor in a company in exchange for capital. In this strategy, start-ups usually conduct a fundraising activity where the public can support a business idea through an online platform. It provides a viable alternative since it enables a large group of individuals (‘the crowd’) to invest in early-stage businesses in return for part-ownership (‘equity’) of the company.
The second leg of the SEC’s nationwide roadshow, dubbed “Roadshow on Capital Market Formation for MSMEs and Start-ups,” has attracted more than a hundred onsite attendees and 185 virtual participants made up of executives from companies, business groups, and government agencies such as the Mandaue Chamber of Commerce, Cebu Chamber of Commerce, the Department of Trade and Industry (DTI) and the Provincial Government of Cebu, among many others.
The initiative aims to harness the potential of MSMEs for further growth and is very much in line with the current administration’s thrust of providing different financing options for small businesses.
MSMEs as the backbone of our economy
“This government recognizes that MSMEs are the backbone of a resilient national economy, due to their nature of stimulating domestic demand through jobs creation, innovation, and competition,” stated SEC Commissioner Karlo S. Bello in a speech delivered during the event.
“In fact, the Philippines’ MSME network accounts for 99.5% of the total businesses in the country, hires 63% of the local workforce, constitutes 25% of the country’s total exports, and contributes around 40% to the national GDP,” he added.
During the event, executives from SeedIn Technology, Inc., Investree Philippines, and Eastern Securities Development Corporation (Round One) — all of which are registered crowdfunding intermediaries and are registered with the SEC — discussed the advantages of crowdfunding and how MSMEs and start-ups can tap their services.
According to Investree and SeedIn Technology, over 200 businesses have already successfully raised capital through their platforms as of December 2022. During this period, SeedIn Technology’s platform has also seen a total of P1.34 billion raised funds for 259 projects.
During the break-out sessions that followed, some of the participants were also given an opportunity to engage in personal consultations with the officials of these platforms.
Investing in stock markets
Aside from equity crowdfunding, the benefits of investing in stock markets were also discussed.
On hand to explain the advantages of having one’s company listed in the Philippine Stock Exchange (PSE) and expanding one’s business through the stock market were Ramon S. Monzon, President of PSE Inc., and Valentino S. Bagatsing, President and CEO of Investment and Capital Corporation of the Philippines.
For its part, homegrown property developer Cebu Landmasters also shared its journey toward conducting its P15-billion initial public offering in 2018.
After the event, Cebu Provincial Board Member Glenn Soco expressed his gratitude to the SEC for bringing the roadshow to Cebu, stating that it aligns well with the provincial government’s vision for promoting the growth of MSMEs.
“When we talk about MSMEs, the provincial government is all ears. [MSMEs] support what Cebu is all about. We could not imagine Cebu without its micro, small, and medium enterprises,” Mr. Soco said.
The roadshow was led by the newly created SEC Office for the Advancement of Strategic Investments in SMEs (OASIS), which was established with the aim of encouraging SMEs to consider the capital market as a financing option.
The effort is part of the SEC’s 888@88 goal, which aims to see a minimum of 888 companies accessing the capital market in time for the SEC’s 88th anniversary in 2024.
After Davao and Cebu, the SEC says it plans to bring the monthly roadshow to other areas in the country, including Cagayan de Oro, Zamboanga, Bacolod, Legazpi, Iloilo, Tarlac, Baguio, the CALABARZON region, and Metro Manila for the rest of the year.
For more information and updates on the roadshow, visit the SEC’s website at www.sec.gov.ph.