The Philippines’ Securities and Exchange Commission (SEC) has successfully driven the growth of the country’s crowdfunding sector, with funds raised approaching P2 billion (about $36 million) in the last three years.
This surge in crowdfunding activity is a direct outcome of the SEC’s nationwide campaign, designed to provide alternative financing options for smaller companies, bypassing traditional banking and stock market routes.
SEC Chair Emilio Aquino, in a recent statement, underscored the success of these initiatives, stating:
The SEC transformed the capital market into a more accessible financing oasis for small businesses, as our year-long nationwide roadshow proved to be a success in attracting micro, small and medium-sized enterprises (MSMEs) and startups toward innovative fundraising options.
Since 2020, crowdfunding, which enables businesses to raise capital from a multitude of small investors online, has become a major source of alternative funding.
The SEC reports about 333 crowdfunding deals, totaling P1.94 billion, which supported 1,143 projects. In 2023 alone, this method assisted 146 companies in raising P427 million for over a thousand projects.
The recent “2023 Roadshow on Capital Formation for Micro, Small and Medium Enterprises and Startups” significantly contributed to these numbers, with 37 of this year’s funding entities participating in the event.
The roadshow, conducted by the SEC Office for the Advancement of Strategic Investments in SMEs (Oasis), extended its reach to various cities, engaging an additional 314 companies in crowdfunding.
The Philippines currently hosts three registered crowdfunding firms: Investree Philippines, SeedIn Technology Inc., and Eastern Securities Development Corp. (Round One).
Aquino highlighted the SEC’s commitment to facilitating connections between small businesses and financing options through initiatives like “Call-a-Friend” and “Engage with SEC.”
The SEC is actively working towards its 888@88 target, aiming to have 888 companies utilize the capital market by its 88th anniversary in 2024.
The regulator also hinted at a strong pipeline of companies preparing for listings on the Philippine Stock Exchange (PSE) in the coming year, following an announcement by BDO Capital & Investment Corp. about preparing six deals that could raise P100 billion via the PSE in 2024.