Annual reporting despite business interruptions

Rosalie T. Lapuz

“Gradually and then suddenly” was how Ernest Hemingway described going bankrupt in The Sun Also Rises and the description seems to apply to the global response to COVID-19. The Securities and Exchange Commission’s (SEC) response also follows this pattern, making adjustments over a short period to address the effects of the Enhanced Community Quarantine (ECQ) on annual reporting.

The SEC originally issued SEC Memorandum Circular No. 2 on Jan. 21, setting the period between April 20 and May 22 as the deadline for companies whose fiscal year ended on Dec. 31 to file their Annual Financial Statements (AFS). Companies whose fiscal year ends on a date other than Dec. 31 have a filing date of 120 calendar days from the end of their fiscal year.

General Information Sheets (GISs), on the other hand, should be filed within 30 calendar days from the following dates based on the type of the corporation:

a) Stock Corporations: date of actual annual stockholders’ meeting
b) Non-Stock Corporations: date of actual annual members’ meeting
c) Foreign Corporations: anniversary date of the issuance of the SEC License

However, after the President declared a state of public health emergency, the SEC issued on March 12 SEC Memorandum Circular (MC) No. 5, Series of 2020 extending the filing of 2019 Annual Reports (ARs) as well as the applicable Quarterly Reports for 2020 and 2019 AFS.


Invoking its regulatory power under Sec. 5.1(g) of the Securities Regulation Code (SRC) and Sec. 179 (o) of the Revised Corporation Code (RCC), the SEC granted affected companies an extension, without penalty, to submit their ARs and/or AFS for the period ended Dec. 31.

a) Companies with domestic operations only: until June 30
b) Companies with domestic and foreign operations: until June 30 or 60 days from the date of lifting of travel restrictions/ban by the authorities (whichever comes later).

The extension is subject to the submission of a written request, confirmation and continuous observance of disclosure obligations for affected publicly-listed and non-publicly listed corporations.

On March 18, two days following President Duterte’s ECQ declaration, the SEC issued a notice further relaxing the requirements for extension requests by dispensing with documents such as the sworn certification by the company’s President and Treasurer confirming that (1) its financial year-end is Dec. 31; (2) it has significant business operations or significant subsidiaries in areas/countries/territories affected by COVID-19, and (3) the preparation of AFS and timely completion of statutory audit of the company’s FS has been affected by travel restrictions, temporary suspension of business operations and/or measures imposed by the authorities or companies in response to COVID-19. The sworn certification by the company’s external auditor confirming 2 and 3 was also dispensed with.

Instead, affected publicly listed corporations now need to submit the following requirements to avail of the extension:

a) Upload SEC Form 17-LC (announced on April 8) via PSE Edge not later than five days before the regular filing deadline;
b) Continuous observance of disclosure obligations under Republic Act No. 8799 or the Securities Regulation Code, and Philippine Stock Exchange’s Consolidated Listing and Disclosure Rules; and
c) Indicative date to convene the Annual Stockholders’ Meeting.


Corporations whose preparation of financial statements or completion of statutory audits are not affected by the COVID-19 outbreak must file their ARs and/or AFS for the year ended 31 December 2019 within the periods prescribed under existing rules and regulations. Companies with fiscal years ending Nov. 30 also receive a similar extension.

On March 18, the SEC issued SEC MC No. 09-2020, which provided the guidelines for the filing of the GIS during the COVID-19 outbreak and ECQ.

a) If a company holds its Election of Directors, Trustees and Officers, the company must submit its GIS within 30 days from the actual meeting to designated channels. Companies are also required to submit printed copies within 30 calendar days from lifting of the ECQ.

b) If the Annual Meeting and Election of Directors or Officers is not held due to COVID-19 health and safety reasons and the corporation has no remote communication facilities, the company reports the same to the SEC through a notice within 30 days from the original meeting date. The report should include a new date for election that is 60 days from the originally scheduled date.

c) If the Annual Meeting of Election of Directors, Trustees or Officers is not held due to other causes, the company reports the same to the SEC within 30 days from the original meeting date, including a new date for election no later than 60 days from the originally scheduled date.

d) If an election initially reported as not held due to COVID-19 precautionary reasons is verified as unrelated to COVID-19 upon application of a stockholder, member, director, or trustee, the same may nevertheless be considered as a non-holding of election due to other causes.

e) If a company does not justify the non-holding of an election under the current circumstances, the SEC issues an order directing a notice stating the time and place of the election in accordance with Section 25 of the RCC.

f) Companies will submit reports relating to the non-holding of annual meetings due to COVID-19 precautionary reasons and due to other causes to the SEC.

g) Companies will report results of the election of directors, trustees, or officers subsequent to the report of non-holding of an election meeting for COVID-19 reasons and other causes, and which is held outside the covered period, to the SEC through a GIS submission within 30 days from the date of the actual election meeting. The GIS submitted pursuant to this paragraph is subject to penalty.

In addition, in MC No. 10-2020 issued March 20, the SEC allowed the filing of the AFS, GIS and other general and special forms and letters through e-mail as long as the documents are in PDF format with electronic signatures. These e-mails must be sent as MIME (Multipurpose Internet Mail Extensions) from a valid company e-mail account or address of an authorized representative and include a declaration of authenticity, a commitment to submit physical copies after the ECQ is lifted, and a request for Return Receipt and Delivery Status Notification. The AFS and GIS may not be notarized. E-mails sent between 8 a.m. to 5 p.m. on a regular workday shall be considered filed within the day they were sent.


After SEC MC No. 09-2020 comes into force, and upon evaluation of ongoing developments relative to COVID-19 and the ECQ, the SEC may further extend the covered period provided as deemed necessary.

Given the current challenging business conditions, the SEC has proven its ability to take timely and decisive action to help businesses cope with their reportorial obligations. Companies, organizations and other regulatory groups that wish to survive and quickly recover after the pandemic would do well to also take purposeful steps of their own, not gradually and suddenly but with a sense of urgency and resoluteness.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Rosalie T. Lapuz is a Senior Director from the Business Tax Services Service Line of SGV & Co.

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