SEC Extension on Filing 2019 Audited Financial Statements under COVID-19

By: Garry S. Pagaspas, CPA

In line with the government’s handling of COVID-19 and pursuant to its regulatory power under Section 5.1(g) of Securities Regulation Code (SRC) and Section 179(o) of the Revised Corporation Code (RCC) Philippines, the Securities and Exchange Commission (SEC) Philippines has issued Memorandum Circular No. 5 series 2020 last March 12, 2020 granting an extension of time without penalty, within which to submit 2019 Annual Audited Financial Statements in Philippines covering the calendar year ended December 31, 2019 as follows:

1. For companies doing domestic operations only: an extension of time until 30 June 2020; and,
2. For companies with domestic and foreign operations: an extension of time until 30 June 2020 or 60 days from the date of lifting of travel restrictions/ ban by the concerned government authorities, whichever comes later.

For such purpose of availing extension of filing 2019 Audited Financial Statements in Philippines of companies affected by travel restrictions under COVID-19, SEC Memorandum Circular No. 5 series 2020 provided the following documentary requirements for compliance:

1. Sworn Certification of the requesting company signed by its President and Treasurer confirming that its financial year end is 31 December 2019; that it has significant business operations or significant subsidiaries in areas/ countries/ territories affected by COVID-19, and, the preparation of the financial statements and timely completion of statutory audit of the company’s financial statements as of 31 December 2019 have been affected by the travel restrictions/ ban, temporary suspension of business operations and/ or measures imposed by the authorities or companies in response to COVID-19;
2. External Auditor’s Sworn Certification of its confirmation on the Sworn Certification signed by the President and Treasurer that its financial year end is 31 December 2019; that it has significant business operations or significant subsidiaries in areas/ countries/ territories affected by COVID-19, and, the preparation of the financial statements and timely completion of statutory audit of the company’s financial statements as of 31 December 2019 have been affected by the travel restrictions/ ban, temporary suspension of business operations and/ or measures imposed by the authorities or companies in response to COVID-19;

Such extension is available for companies affected by COVID-19 and for companies whose preparation of audited financial statements or completion of statutory audits are NOT AFFECTED by the COVID-19, they are required to file 2019 audited financial statements for the year ended 31 December 2019 within the periods provided by existing rules and regulations.

Author’s comment:

The SEC Memorandum Circular No. 5 series 2020 providing extension of time to file 2019 audited financial statements provided no time frame within which to file the request for extension along with the above documentary provided and no format of such Certifications has also been provided. SEC also did not provide as to when and how to avail such extension so let us wait for SEC’s further guidelines relative to this.

References: SEC Memorandum Circular No. 5 series 2020

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