The Philippine Stock Exchange releases ESG compliance guide

The Philippine Stock Exchange (PSE) recently launched a sustainability reporting guidebook for publicly listed companies to enhance environmental, social, and governance (ESG) compliance.

The guidebook, called “ESG 101: A Reporting Guidebook,” was developed by the local market operator with reference to the “2015 Model Guidance on Reporting ESG Information to Investors” by the United Nations Sustainable Stock Exchanges initiative, the PSE said in a notice on its website posted on Jan. 15.

“It is hoped that this guidance document will serve as a sufficient starting point for companies seeking to enhance their sustainability reporting capabilities,” PSE President and Chief Executive Officer Ramon S. Monzon said.

The guidebook contains updated sustainability reporting regulations, data, and best practices deemed relevant to Philippine listed companies.

Mr. Monzon said the guidebook highlights the vital elements of an ESG report to better serve the needs and expectations of investors and internal stakeholders.

“ESG factors are increasingly recognized as important for investors and issuers alike. Therefore, the PSE has developed a guidance document to help issuers who seek to take the next step towards quality sustainability reporting aligned with international best practices, standards, and frameworks,” Mr. Monzon said.

The PSE said the guidebook should be used alongside globally recognized reporting frameworks and standards and should not replace any sustainability-related legislation and rules issued by legislators and regulators.

“The exchange’s contribution to sustainability can come in many forms, not least through facilitating the disclosure of material sustainability information,” PSE Chief Operating Officer and Sustainability Head Roel A. Refran said.

“This reporting guidebook is the PSE Sustainability Unit’s first step to provide market participants with useful guidance towards quality reporting,” he added.

The Securities and Exchange Commission (SEC) recently said that its new sustainability reporting guidelines will be released this year and will be gradually enforced.

Since requiring listed companies to submit sustainability reports in 2019, the SEC said it has recorded a consistently high compliance rate, reaching 96% in 2023.

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Source: Business World

PHL undernutrition seen costing economy $8.5 billion each year

Undernutrition in the Philippines is estimated to cost the economy up to $8.5 billion a year, according to Nutrition International’s Cost of Inaction Tool.

“In the Philippines, the cost of inaction is estimated to be $8.5 billion per year,” Nutrition International Health Economics Project Director Dylan Walters said.

“A similar relative economic cost of around 2% of gross national income (GNI) is (attributed to) malnutrition,” he added.

The Cost of Inaction Tool estimates the health, human capital and economic costs of inaction on stunting, low birthweight and anemia in women and children across over 140 countries.

“As we know, child nutrition has a major effect on human capital loss, as well as educational performance and cognitive loss. That is a significant irreversible human capital deficit that we should be paying more attention to,” Mr. Walters said.

The annual cost of stunting in the Philippines is estimated at $8.1 billion or 1.9% of GNI, accounting for the bulk of the estimated losses. 

“Stunting, or being too short for one’s age, is defined as a height that is more than two standard deviations below the World Health Organization (WHO) child growth standards median,” Nutrition International said.

“It is a largely irreversible outcome of inadequate nutrition and repeated bouts of infection during the first 1,000 days.”

Out of 23 countries in East Asia and the Pacific, the Philippines has the sixth-highest prevalence of stunting. In the world, it ranks 36th out of 175 countries.

The lower the ranking number means higher prevalence of the disease.

Source: Business World

PHL improves in bribery risk ranking

The Philippines improved its ranking in a global index assessing business bribery in over 190 economies.

This, as the National Government cited major strides in its fight against corrupt practices including the digitalization of state transactions and vowed to draw lessons from other countries’ anti-corruption mechanisms.

Manila rose eight spots to 111th place out of 194 countries in the 2024 edition of the Bribery Risk Matrix by nonprofit businesses group TRACE.

The Philippines received a score of 52 out of 100, indicating a “moderate risk” level.

While the country’s ranking in the latest index improved, its overall score fell by two points from 54 in the 2023 edition, where the country ranked 119th.

The index assessed countries in four domains such as opportunity risk, which refers to business transactions with the government, and deterrence risk, which measures a country’s ability to deter and prosecute bribery offenses.

The two other domains are transparency risk, which measures the government’s openness in terms of public budget and potential financial conflicts, and oversight risk, which refers to the role played by nonstate actors in monitoring and controlling corruption.

Among select East and Southeast Asian countries, the Philippines was behind Mongolia (99th) Thailand (89th), Malaysia (81st), Timor-Leste (75th), Indonesia (66th), Hong Kong (37th), Singapore (25th), Taiwan (22nd), South Korea (21st), and Japan (10th).

The Philippines was just ahead of Brunei Darussalam (115th), Vietnam (123rd), China (142nd), Myanmar (163rd), Laos (165th), Cambodia (170th), and North Korea (194th).

Among the four domains, the Philippines got the highest score in deterrence risk at 75.

It received a score of 50 in opportunity risk, 49 in transparency risk and 44 in oversight risk.

The latest bribery risk index was released just as the Philippines held the 5th Conference on the Review and Implementation of its participation in the United Nations Convention against Corruption (UNCAC), and as the country’s second-highest official is hounded by an impeachment complaint in which bribery was cited as one of the grounds.

The treaty, which was signed by Manila in 2003 and was ratified by the Senate in 2006, aims to develop and implement effective and coordinated anti-corruption policies that “promote participation of society” and reflect the principles of the rule of law, proper management of public affairs and public property, transparency, and accountability.

In his speech, President Ferdinand R. Marcos, Jr. said “by learning from and working with other nations, we strengthen our anti-corruption mechanisms while reaffirming our place as a proactive member of the global community.”

“These interconnected efforts form a united approach to fostering a government that is efficient and accountable,” he added. “We continue to collaborate on the international front, emphasizing the importance of global partnerships in combating corruption.”

Mr. Marcos cited major accomplishments in his government’s fight against bribery and other corrupt practices, including the passage of the Government Procurement Act earlier this year.

The law establishes standardized electronic bidding and payment systems through an electronic procurement system.

The law minimizes the risk of corruption and creates “a more detailed audit trail,” he said. “This will in turn provide transparency and proactive government monitoring, thereby ensuring judicious government spending.”

Mr. Marcos said the Philippine government also has an electronic freedom of information platform, where citizens can “exercise their right to vital government information.”

He noted the 2024 procurement law also has provisions that encourage participation from “observers and civil society organizations in procurement” and “make all procurement-related conferences available for public viewing.”

The Philippines continues to struggle with corrupt practices in the public sector even after the end of dictatorship in the 1980s, with the Asian Development Bank estimating that corruption costs the country 1-2% of its gross domestic product annually.

“The current Congressional and Senate hearings on the Office of the Vice-President’s (OVP) budget is a clear manifestation that bribery, as well as other forms of corruption, is indeed notches higher in the administration,” said Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University.

“Certain people in the government think that they are entitled enough to do anything without accountability.”

He was referring to Vice-President Sara Duterte-Carpio, who is now facing a legal storm after the 316-member House of Representatives launched a probe into her questionable confidential funds at the OVP and the Department of Education.

Ms. Duterte-Carpio, who ran in tandem with Mr. Marcos in the 2022 elections, is now facing an impeachment complaint, which cited 24 grounds including betrayal of public trust, bribery, and high crimes.

“Crony capitalism is back as institutions developed after the EDSA Revolution have grown weaker,” Mr. Lanzona said. “People who were being litigated before are now scot-free because of the patronage and power gained in this administration.”

In his speech at the UNCAC read by Manila Rep. Joel R. Chua, who has been at the forefront of inquiries into Ms. Duterte-Carpio’s questionable use of funds, House Speaker Ferdinand Martin G. Romualdez said the “ongoing hearings in the House demonstrate our unwavering resolve to uphold accountability and transparency.”

“The fight against corruption is not the responsibility of any one branch of government; it is a collective effort,” he added.

He said the House will work with the Judiciary, Executive agencies, the civil society, and international partners to boost its capacity to “investigate and prosecute, and enforce anti-corruption measures.”

In his speech, Senate President Francis G. Escudero said that in the fight against corrupt practices, “equally important is the proper use of our oversight power not to harass or attack for political gain but to expose and rectify corruption for national progress.”

“One famous formula summarized the cause of corruption as follows. Corruption equals monopoly plus discretion, minus transparency,” Mr. Escudero said. “But for me, I simply define it as corruption equals discretion and vice versa.”

“Minimize discretion, you minimize corruption,” he added. “Eliminate discretion, you eliminate corruption.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort urged the government to push for policies that will encourage the private sector to comply with the environmental, social, and governance standards, which he said are key to minimizing bribery risks in both sectors.

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Source: Business World