Philippine SMEs face IPO funding difficulties due to limited domestic liquidity

Capital market executives noted that small and medium-sized enterprises in the Philippines are struggling to raise capital through Initial Public Offerings (IPOs). Paolo Antonio Azurin, President and Chief Executive Officer of CLSA Exchange Capital, Inc., stated that limited domestic liquidity makes it difficult for these smaller companies to secure funding. He also mentioned that the high costs and resources required to go public can discourage smaller offerings when investor demand is insufficient.

The difficulties stem from a limited pool of domestic investors in the Philippine stock market. Azurin suggested that a stronger domestic investor base could make smaller IPOs more viable and reduce reliance on foreign investors. Meanwhile, Eduardo V. Francisco noted that while the equity market faces these issues, the market for bonds and preferred shares has remained active.