Glenn D.

Getalado
BBG

Corporate Reform Act (House Bill 286 / Lapus Bill)

the proposal establishes clearer standards for corporate accountability and imposes
stricter penalties for corporate fraud and similar acts.

the bill seeks to put in check corporate abuses by banning accounting firms from
providing consulting services to companies they audit; requiring the rotation of the
accounting partner overseeing the audits of a specific company every five years;
requiring the chief executive officers (CEOs) to certify to the accuracy of their financial
reports that are under threats of punishment; prohibiting loans to executives of publicly
listed companies or companies imbued with public interest; and imposing severe
penalties on securities fraud, as well as the shredding or altering of records related to an
ongoing investigation.

To oversee the audit of public companies that are subject to securities laws and other
existing regulations, the bill also proposes to establish the Public Company Accounting
Oversight Board, a body corporate that shall operate as a nonprofit corporation.

ensure the protection of the funds of security and insurance systems of the government
and other companies against unscrupulous promoters, investors, businessmen and
traders who venture claims or invest corporate funds in worthless undertakings

Credit Rating Agencies

A credit rating agency (CRA) is a company that assigns credit ratings for issuers of
certain types of debt obligations as well as the debt instruments themselves. In some cases, the
servicers of the underlying debt are also given ratings.
In most cases, the issuers of securities are companies, special purpose entities, state
and local governments, non-profit organizations, or national governments issuing debt-like
securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer
takes into consideration the issuer's credit worthiness (i.e., its ability to pay back a loan), and
affects the interest rate applied to the particular security being issued.

Credit Rating Agencies in the Philippines

1. Philippine Rating Service Corporation
The Philippine Rating Service Corporation (PhilRatings) is the only domestic credit
rating agency (CRA) in the Philippines accredited by both the BSP and the SEC. The
rating agency is also an affiliate of Standard and Poors.
2. Credit Rating and Investors Services Philippines
Credit Rating and Investors Services Philippines (CRISP),5 a domestic CRA in
the Philippines, was launched and received its accreditation as a CRA from the
SEC in 2008