Although the Securities Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) have gone a long way in developing and improving the capital market, the Philippines remain at a state of stagnation in terms of stock trading activity. We have argued that what kept the PSE dead last in terms of stock trading activity is the meager investor participation brought about by the limited number of listed companies. The Association of Southeast Asian Nations (ASEAN) stock exchanges is led by Malaysia with 1,056, Indonesia with 956, Thailand with 857, Vietnam with 699, Singapore with 612 and the Philippines with 284. While the policymakers can lower the requirements for companies applying for listing by way of an initial public offering, introduction or backdoor to minimize if not eliminate unnecessary regulatory procedures that create compliance costs, it would take a considerable amount of time before we can persuade companies to go public and encourage investors to take part in stock trading. If the policymakers want to increase the number of listed companies at the shortest possible time then they can take advantage of the sovereign guarantee of the government by listing the qualified Government-owned or Controlled Corporations (GOCC). A sovereign guarantee is a legal commitment by a government to cover specific financial obligations if a borrower defaults while a GOCC is a corporation chartered by special law or if organized under the general corporation law is owned or controlled by the government. Most GOCC are subsidized by the government to cover operational expenses while the rest have enough revenues to remit dividends to the government. Under Republic Act 7656 or the Dividends Law, GOCC must declare and remit at least 50% of their annual net income to the government. As of 30 September 2025, there are 218 GOCC in which 53 are dividend-paying while 165 are government-subsidized. Since these dividend-paying GOCC are considered qualified companies to apply for listing by way of an initial public offering, introduction or backdoor then it would be reasonable for the government to do so. Making a GOCC a public corporation owned by the general population rather than by the government alone can enhance brand status, strengthen capital market, elevate public accountability, improve corporate governance, increase operational transparency, broaden retail ownership participation and reduce institutional ownership concentration. This can be a public private partnership undertaking wherein the public sector through the government and the private sector through the stakeholders can work together to make the dividend-paying GOCC genuine public companies and welcome addition to the roster of listed companies.
