Jennifer Marie G. Castro
The Securities and Exchange Commission (“SEC”) issued on 02 June 2026 a Notice classifying publicly-listed companies (“PLCs”) as follows:
Tier 1 – PLCs with market capitalization of more than PHP50 Billion;
Tier 2 – PLCs with market capitalization of more than PHP3 Billion up to PHP50 Billion; and
Tier 3 – PLCs with market capitalization of PHP3 Billion or less.
The Notice shared this link, which contains the list of PLCs and their corresponding tier classifications.
The above tier classification framework operationalizes SEC Memorandum Circular No. 16, series of 2025 (“MC 16”), which adopted the Philippine Financial Reporting Standards (“PFRS”) on Sustainability Disclosures and Sustainability Reporting Guidelines for PLCs and certain large non-listed entities (“LNLs”).
MC 16 replaces the previous sustainability reporting framework under SEC Memorandum Circular No. 4, series of 2019 (“MC 4”). Under MC 4, PLCs were generally permitted to adopt any internationally recognized sustainability reporting framework. MC 16 now mandates the use of the PFRS Sustainability Disclosure Standards, specifically:
• PFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information; and
• PFRS S2 – Climate-related Disclosures.
Pursuant thereto, covered companies shall adopt PFRS S1 and PFRS S2 with limited extensions of transition standard reliefs as follows:
Tier 1 | Fiscal year beginning on or after 01 January 2026, for reporting in 2027 |
Tier 2 | Fiscal year beginning on or after 01 January 2027, for reporting in 2028 |
Tier 3 | Fiscal year beginning on or after 01 January 2028, for reporting in 2029 |
The foregoing shall be reported in the Sustainability Report, which is an attachment to the Annual Report. Under MC 16, all PLCs and LNLs are required to have their Sustainability Reports reviewed and approved by the board of directors prior to issuance.
MC 16 represents a significant development in Philippine corporate disclosure regulation. By adopting PFRS S1 and PFRS S2 and introducing a tier-based implementation framework, the SEC has aligned sustainability reporting requirements with emerging global standards while providing a phased transition period for covered companies. PLCs should review their tier classification and begin assessing the operational, governance, and reporting measures necessary to achieve compliance within the applicable timeline.