The Securities and Exchange Commission on Wednesday partnered with the United Nations Office on Drugs and Crime (UNODC) and Open Ownership to harness the potential of using beneficial ownership data in curbing corruption in the government procurement process.
This has relevance to the mandatory declaration of beneficial owners in the general information sheet submitted by corporations under SEC Memorandum Circular 15 issued in 2019.
“Beneficial ownership plays an important role in detecting indicators of bid rigging and conflicts of interest during the procurement process. As such, it is important that we ensure there are few avenues for corrupt individuals to take advantage of the system,” SEC chairman Emilio B. Aquino said.
Beneficial owners exercise ultimate effective control over corporations and different from legal owners as they may directly or indirectly have power to vote or influence transaction decisions even without them being reported as stockholders, members, directors or officers.
The SEC and the UNODC have organized a focus group discussion on beneficial ownership data use in public procurement.
Participants include officers from the Philippine Competition Commission, the House of Representatives, Office of the President, Office of the Ombudsman, the Philippine Government Electronic Procurement System and the Government Procurement Policy Board Technical Support Office.
The discussions focused on the application of beneficial ownership in public procurement, emphasizing the importance of data in mitigating corruption and improving the decision-making process of the procurement lifecycle.
In 2022, the SEC signed a data sharing agreement with the GPPB-TSO as part of its commitment to enhance public procurement and beneficial ownership transparency.
The SEC also partnered with the Bureau of Internal Revenue to explore the use of beneficial ownership data to support tax enforcement. It has put forward the use of beneficial ownership data in promoting tax integrity and combating corruption. Beneficial ownership data can be used to reveal individuals who ultimately control legal entities and aid in the promotion of tax integrity.
“Taxation is an important element of ensuring the economic stability of a nation,” Aquino said.
In cooperation with the UNODC and other government agencies, the SEC hopes to find ways to limit tax evasion and help in the economic development by maintaining tax integrity.
