Suits the C-Suite

18 May 2026

Elvin N. Mercader

From threat to thrust: Turning technology risk into strategic advantage

In brief:Technology risk has evolved into an enterprise leadership challenge, as decisions on governance, execution, cybersecurity, third party ecosystems, and AI increasingly determine whether digital investments deliver value or erode trust.Technology risks are interconnected and lifecycle based, with gaps in governance cascading into execution failures, cybersecurity exposure, third party dependency, and amplified AI accountability risks.The goal of technology risk management is confidence—not control, enabling responsible innovation, resilient operations, and sustained trust in an increasingly complex digital environment.“Leading organizations embed risk awareness into strategy, execution, and oversight — recognizing that confidence, not control, is the objective."Organizations that treat technology risk as a strategic input — rather than a compliance exercise — gain speed, resilience, and trust. Drawing on insights from the recent SGV thought leadership forum, “Transforming Risk into Strategic Advantage,” held on 6 May 2026, this perspective reflects how leading organizations are reframing risk as a driver of value. These benefits materialize only when leadership explicitly positions risk as an enabler of value, embeds risk into strategy and delivery, and applies governance mature enough to provide clarity rather than friction. Under these conditions, organizations gain speed not by reducing rigor but by making risk timely, proportional, and relevant to business decisions.The paradox of digital transformationAs digital capability becomes a competitive differentiator, organizations are accelerating the adoption of new platforms, delivery models, and intelligent technologies. However, a critical leadership question persists: Are technology decisions truly driving advantage — or quietly increasing enterprise risk?While technology enables growth, it also introduces operational, regulatory, and ethical complexity. In many organizations, innovation has outpaced the maturity of governance, risk oversight, and organizational readiness. This creates a central paradox: technology is adopted to increase speed and resilience, yet unmanaged risk slows momentum and erodes trust. Artificial intelligence (AI) intensifies this challenge by amplifying long‑standing concerns around cybersecurity, data quality, ethics, and accountability. Technology risk is no longer technical — it is a strategic leadership issue.Crucially, these risks do not occur independently. They form a connected system where weaknesses in one area cascade across the enterprise. When managed intentionally, this complexity becomes a source of advantage.Technology governance: Alignment and decision qualityTechnology governance is often mistaken for bureaucracy. In practice, it ensures digital ambition translates into business value.Without strong governance, priorities compete, costs rise, and leadership confidence diminishes — particularly as organizations introduce multiple platforms, vendors, and emerging technologies. Effective governance aligns digital investments with strategy, clarifies expected benefits, and embeds risk considerations early in decision making. When enterprise architecture is reduced to documentation, it adds little value. When used as a strategic decision lens, it helps leaders make informed portfolio trade‑offs, identify platform rationalization opportunities, and understand the implications of scaling, integration, or acquisitions before costs and complexity become entrenched. In complex transformation environments, decision quality improves when organizations use structured governance reviews to evaluate how technology decisions, investments, and risks are overseen. The goal is insight, not additional layers of control — ensuring clarity on accountability, priorities, and exposure tied to business outcomes. Where governance lacks coherence, execution risk quickly follows.Technology implementation: Value realizationEven the strongest strategies fail without disciplined execution. Across large‑scale transformation programs, execution challenges most often emerge when requirements lack clarity, data readiness is underestimated, access controls are not designed upfront, and users are insufficiently prepared for change.These gaps drive workarounds, low adoption, and delayed value realization. Leadership oversight becomes effective when assurance is applied at key inflection points — before go‑live to surface design and control risks while change is still feasible, and after implementation to confirm that execution, controls, and benefits align with business intent. This shift requires assurance teams to engage earlier and operate with greater business fluency, which enables faster escalation, fewer go‑live surprises, and clearer accountability for executive sponsors.Cybersecurity: Trust and resilienceCybersecurity sits at the intersection of trust, continuity, and executive accountability. Leaders must confidently answer whether critical assets are protected, vulnerabilities are understood, and incidents are manageable.When treated as a constraint, security slows innovation. When embedded early into digital design — rather than bolted on late — it introduces predictable friction upfront, reducing disruptive rework, incidents, and loss of confidence downstream. Clear ownership, asset visibility, security by design principles, and zero trust approaches allow scale while reinforcing trust.Cyber resilient organizations strengthen confidence through cybersecurity program assessments complemented by vulnerability testing and penetration validation, enabling executives to prioritize based on business impact rather than technical noise.Third party risk: Ecosystem resilienceModern transformation depends on ecosystems of vendors and partners. While these relationships enable speed and specialization, they also introduce dependency and exposure. Third party risk is no longer confined to procurement or compliance; it is an enterprise resilience issue, as critical operations, data, and decision making increasingly depend on a concentrated ecosystem of cloud, SaaS, and AI providers. As dependencies deepen, executives must consider exit and substitution risk — how quickly operations, data, or AI capabilities could be transitioned if a key vendor fails or changes terms.AI: Readiness and accountabilityAI has moved from experimentation to expectation. While it offers significant productivity gains, many initiatives fall short due to insufficient readiness rather than technical limitation.The greatest AI risk is not algorithm failure — it is unclear accountability when outcomes go wrong. Risk varies significantly across AI use cases — from predictive decision support to fully autonomous action — requiring boards and executive leadership to adjust oversight and accountability as automation increases.Before scaling AI, leaders must assess governance maturity, data reliability, workforce preparedness, and incident readiness. AI governance readiness assessments help clarify oversight, ownership, and escalation across the AI lifecycle, providing boards and executives with the confidence to scale responsibly.A strategic framework for reframing technology riskAcross these domains, a clear pattern emerges: technology risks are interconnected and lifecycle based. Governance, implementation, cybersecurity, third party risk, and AI are enterprise drivers of both value and risk—not separate conversations.Across complex digital environments, three imperatives consistently separate confident decision making from reactive risk management:1. Integrate risk intelligence into digital strategy to make intentional trade offs without sacrificing trust.2. Manage risk across the full technology lifecycle, enabling early detection and decisive response.3. Shift from control to confidence, ensuring innovation scales responsibly.These principles are operationalized through targeted assessments across governance, execution, security, third party ecosystems, and AI, providing leadership with continuous visibility and confidence. The starting point is not more controls, but better visibility. Organizations that progress most effectively begin by establishing a single, enterprise view of technology risk and focusing leadership attention on the areas where gaps in ownership, execution, or trust could materially impact outcomes.Confidence, not controlOverseeing technology risk is no longer a technical responsibility — it is a core executive mandate. Leading organizations embed risk awareness into strategy, execution, and oversight, recognizing that confidence, not control, is the objective.Leaders are increasingly challenged to reflect on whether they have a single, integrated view of technology risk across the entire lifecycle, ensuring that risks are not assessed in isolation but understood holistically. Equally important is identifying where decisions may be occurring without sufficient visibility into downstream risk or clear accountability, as these blind spots can amplify exposure and weaken governance. Leaders must also consider which initiatives would be most vulnerable if trust in security, data integrity, or third party resilience were suddenly compromised, recognizing that the strength of these critical foundations can directly determine whether key programs continue forward or stall under pressure.Technology risk leadership does not slow organizations down. It enables leaders to move faster with intent without sacrificing resilience, trust, or value. For today’s executives, the question is no longer whether technology risk should be addressed, but how deliberately it is shaped into strategic advantage.Elvin N. Mercader is a Technology Risk Senior Director of SGV & Co.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.

08 May 2026

Aris C. Malantic

Reimagining the finance function: Turning risk foresight into strategic insight

In brief:Finance must evolve from a compliance-driven function into a strategic partner that translates risk into value.Organizations need a risk strategist mindset to navigate a non-linear, accelerated, volatile, and interconnected (NAVI) environment.Targeted transformation across accounting excellence, finance operations, the financial statement close process, and the financial planning and analysis (FP&A) will enable the finance function to drive sustainable growth.“In a world where multiple challenges must be addressed simultaneously, those who succeed will not be those who manage risk the best, but those who understand it deeply enough to use it as a catalyst for growth."In today’s business landscape, C-suite leaders are navigating what can best be described as the “Age of And,” a period in which organizations must address multiple, simultaneous challenges while still delivering growth. This convergence of demands is driven by rapid, non-linear changes in the business environment, creating overlapping and interconnected risks that require agile response in parallel.At the center of this complexity sits the finance function. Traditionally viewed as a steward of financial reporting and compliance, finance is now uniquely positioned to become a strategic nerve center — capturing, processing, analyzing, and interpreting enterprise-wide data. The critical question for today’s leadership is no longer whether finance should transform, but how it can transform risk foresight into meaningful financial insight.The new risk reality: Navigating a NAVI risk environmentC-suite leaders are increasingly operating in what can be described as a NAVI risk environment — non-linear, accelerated, volatile, and interconnected. Risks are no longer isolated; they cascade across functions, geographies, and value chains.Philippine C-suite leaders were made aware of the urgency of this shift through insights shared at the recent SGV thought leadership forum titled “Transforming Risk into Strategic Advantage,” held on 6 May 2026. Regulatory compliance risk emerged as the top concern (24%), followed by market risk (18%) and third-party risk (17%). These priorities reflect a business environment where regulatory pressures continue to intensify, market conditions remain unpredictable, and reliance on extended ecosystems introduces new vulnerabilities.At the same time, emerging external forces are reshaping strategic agendas. Advances in quantum computing are expected to introduce more complex cybersecurity and data privacy challenges (37%), while regulatory fragmentation across jurisdictions (31%) complicates compliance strategies. Additionally, the increasing frequency and severity of climate-related disruptions (25%) underscore the growing importance of sustainability and resilience in financial decision-making.For Philippine organizations — many of which are deeply integrated into global value chains — these risks are amplified by regional regulatory diversity, evolving digital infrastructure, and heightened exposure to climate events.From risk management to risk strategyDespite the growing complexity, many organizations continue to approach risk management with traditional, compliance-driven mindsets. These legacy approaches are characterized by “check-the-box” practices, static frameworks, and limited innovation. While such methods may ensure baseline compliance, they are insufficient to address the dynamic and interconnected risks of today’s environment.A shift toward a risk strategist mindset is therefore imperative.Risk strategists go beyond mitigation. They align risk management with overall business strategy to ensure that risk considerations inform key decisions at the highest levels. They leverage risk insights to unlock value, rather than simply prevent loss.Moreover, they embed a culture of innovation and accountability within the risk function, incentivizing teams based on business outcomes rather than compliance metrics alone.This transformation places finance in a pivotal role. As a function with end-to-end visibility across financial and operational data, finance is uniquely positioned to integrate risk considerations into strategic planning, performance management, and capital allocation.Reimagining the finance functionTo thrive in this evolving risk landscape, finance leaders must reimagine their function across four critical transformation areas:Accounting Excellence. Accounting remains the foundation of financial integrity, but it must evolve to reflect emerging risks and complexities. Finance teams should proactively assess the potential impact of new financial reporting standards, such as PFRS 18, and ensure that their chart of accounts accurately captures evolving business realities. System and reporting updates must also be carefully coordinated to ensure consistency, transparency, and compliance across the organization. In a fragmented regulatory environment, the ability to adapt reporting frameworks quickly is a key competitive advantage.Finance Operations. Operational efficiency is no longer sufficient; finance operations must be strategically aligned with business needs. This requires a clear understanding of which elements of the operating model require immediate attention — whether it be process standardization, organizational structure, or technology enablement. Leaders must strike a balance between complexity and proximity, ensuring that finance remains close enough to the business to provide actionable insights while maintaining standardized processes that drive efficiency. Initiatives should be prioritized based on their alignment with strategic objectives, rather than isolated operational improvements.Financial statement close process. The financial close process is often an area ripe for transformation. Many organizations continue to rely on manual processes, fragmented systems, and spreadsheet-driven workflows, which limit speed, accuracy, and scalability. A structured diagnostic approach is essential. Finance teams should assess their close processes across five foundational pillars: people, process, technology, data, and control. By mapping dependencies and identifying bottlenecks, organizations can uncover opportunities for improvement. Benchmarking against industry peers can further highlight gaps and best practices. More importantly, technology must be leveraged not merely to automate existing processes, but to fundamentally redesign them. Eliminating spreadsheets and integrating systems can significantly enhance efficiency and reduce risk.Financial planning and analysis (FP&A). FP&A is rapidly becoming the strategic core of the finance function. In a volatile environment, static planning cycles are no longer sufficient. Organizations must adopt integrated business planning approaches that enable real-time performance analysis. This requires a holistic assessment of processes, people, and data. Finance teams must enhance their capabilities in scenario planning, forecasting, and integrated reporting. At the same time, investment in talent development and governance structures is critical to ensure that teams can effectively interpret and act on insights.Data integration is particularly important. The ability to combine financial and non-financial data — from operations, supply chains, and external sources — enables more accurate forecasting and more informed decision-making.Turning financial risks into strategic advantageUltimately, the goal of finance transformation is not simply to manage risk, but to harness it as a source of strategic advantage. For C-suite leaders, this requires a concerted focus on three key priorities.First, organizations must transform finance culture and capability. This involves embedding agile mindsets, upskilling talent, and building a future-ready workforce. In the Philippine context, where talent competition remains strong, targeted development and succession planning are essential to sustaining long-term capability.Second, leaders must drive value-led strategies. This means aligning long-term vision with clear, measurable objectives across the short and medium term. Data-driven insights should reinforce decision-making, supported by strong collaboration between finance and other executive functions.Finally, leadership impact must be strengthened through robust executive dialogue and continuous learning. As risks evolve, so too must leadership approaches. Developing next-generation leaders and fostering a culture of curiosity and adaptability will be critical to staying ahead of disruption.The way forwardThe “Age of And” presents both challenges and opportunities. For finance leaders, it is a defining moment — an opportunity to redefine the role of finance from a function focused on reporting the past to one that actively shapes the future with confidence.By embracing a risk strategist mindset and investing in targeted transformation initiatives, finance can move beyond traditional boundaries. It can become a strategic partner to the business, turning risk foresight into financial insight, and ultimately, into sustainable value creation.In a world where multiple challenges must be addressed simultaneously, those who succeed will not be those who manage risk the best, but those who understand it deeply enough to use it as a catalyst for growth.Aris C. Malantic is the Assurance Growth Areas Leader and Financial Accounting Advisory Services (FAAS) Leader of SGV & Co.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.

04 May 2026

Meynard Sardalla

VAT zero-rating for non-IPA registered exporters

In brief:VAT zero‑rating incentive on local purchases for exporters under CREATE MORE is performance‑based. Export‑oriented enterprises must consistently meet the 70% export sales threshold to retain the incentive, as failure in one year results in loss of zero‑rating in the succeeding year.Certification, not registration, is the key trigger. Continued entitlement depends on obtaining and maintaining DTI‑EMB certification, which suppliers rely on to apply VAT zero‑rating on local purchase of export oriented enterprises.To sustain the incentive, exporters must actively monitor export performance, clearly link costs to export activities, align suppliers, and remain audit‑ready under a streamlined but enforcement‑focused regime.“VAT zero-rating on local purchases is no longer limited to PEZA- or BOI-registered enterprises. Export-oriented enterprises — including those without IPA registration — may now enjoy the same incentive, subject to strict compliance with the law and its implementing rules."For many years, VAT zero-rating on local purchases was largely associated with enterprises registered with investment promotion agencies (IPAs). IPAs refer to government entities authorized to register businesses and administer fiscal and non fiscal incentives under Philippine investment laws. Key IPAs include the Philippine Economic Zone Authority (PEZA), the Board of Investments (BOI), and similar bodies. In practice, the VAT zero-rating was commonly viewed as an incentive tied to registration status and location within economic zones.The CREATE MORE Act has fundamentally reshaped this understanding. VAT zero‑rating on local purchases is no longer reserved solely for IPA‑registered businesses. It is now also expressly available to export‑oriented enterprises (EOEs), including those that are not registered with any IPA or whose incentive periods have already lapsed.VAT zero-rating beyond IPAsCREATE MORE clearly recognizes that exporters contribute to the economy in different ways and through different business models. As such, VAT zero-rating on local purchases and VAT exemption on importations may now be enjoyed by export-oriented enterprises, even outside traditional economic zones.This does not mean, however, that VAT zero-rating has become easier to obtain.While IPA-registered enterprises often operate within structured and time-bound incentive frameworks, export-oriented enterprises availing of VAT zero-rating outside IPAs must rely almost entirely on annual performance validation and documentary compliance. The incentive is no longer anchored on registration alone, but on whether the exporter can consistently satisfy the prescribed requirements.The non-negotiable export thresholdAt the core of the CREATE MORE framework for EOEs is a clear and objective rule: at least 70% of an enterprise’s total annual production in the preceding taxable year must consist of export sales.This threshold is determinative. Failure to meet it does not merely result in technical non-compliance; it leads to the loss of VAT zero-rating in the succeeding taxable year. For many exporters, this forward-looking consequence is often underestimated, despite its direct impact on pricing, cash flow, and supplier arrangements.VAT zero-rating for EOEs is therefore not a static tax incentive but an outcome that depends on continuous compliance.A clear compliance gate: DTI-EMB certificationCREATE MORE, together with its implementing regulations, makes an important clarification: Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) certification is now the operative basis for VAT zero-rating for export-oriented enterprises, not IPA registration.A CREATE MORE EOE certificate issued by the DTI-EMB confirms that the exporter has met the required export sales threshold and is eligible to enjoy VAT zero-rating on local purchases and VAT exemption on importations.Revenue Memorandum Circular No. 10-2025 reinforces this framework by providing that local suppliers are no longer required to secure prior BIR approval to apply the zero VAT rate, as long as the buyer presents a valid DTI-EMB certification. This streamlines transactions and places greater responsibility on exporters to ensure that their certifications are valid, current, and properly supported.Without DTI-EMB certification, VAT zero-rating on local purchases cannot be availed of — regardless of how export-driven the enterprise may be.DAO 25-03: What it takes to secure and maintain VAT zero-ratingDTI Department Administrative Order (DAO) No. 25-03 provides the detailed rules on how export-oriented enterprises must demonstrate compliance.The order outlines the documentary requirements, application procedures, validity period, and grounds for revocation of the EOE certificate. Exporters are required to submit financial statements, export sales data, proof of inward remittances, export documentation, and a sworn declaration that the export threshold was met in the preceding year. Crucially, the certificate is valid only for the applicable taxable year. Delays in submission, incomplete documentation, or failure to meet the export threshold may result in revocation, immediately cutting off access to VAT zero-rating on local purchases.DAO 25-03 also makes clear that certification does not eliminate audit exposure. Transactions remain subject to post-audit verification, particularly on whether purchases claimed as VAT-zero-rated are reasonably connected to export activities.Broader access, higher stakesTaken together, CREATE MORE, RMC No. 10‑2025, and DAO 25‑03 create a VAT zero‑rating regime that is more inclusive but also more exacting.Export‑oriented enterprises now have a path to VAT zero‑rating even without IPA registration, but this narrow path must be navigated carefully. Once export performance falls below the threshold or compliance lapses, the incentive is quickly lost — often with immediate financial consequences.For exporters outside IPAs, the absence of long‑term registrations means that annual compliance is the sole basis for entitlement. VAT zero‑rating becomes a privilege that must be renewed every year through performance and documentation.The real challenge: sustainabilityCREATE MORE makes VAT zero rating more inclusive, but also more demanding.Enterprises that approach compliance reactively — checking export ratios only at year end or treating certification as an administrative formality — face real risk. Once zero rating is lost, recovery is not immediate. The resulting cash flow strain can be significant, particularly for exporters with thin margins.Sustaining VAT zero‑rating on local purchases for EOEs now requires the following:Continuous monitoring of export performanceClear identification of costs supporting export activitiesTimely and complete certification submissionsStrong coordination between operations, finance, tax, and procurement teams This makes sustaining a VAT zero rating a management issue instead of just a tax compliance matter.A clear message for business leadersThe CREATE MORE framework sends a clear signal. VAT zero-rating on local purchases is no longer limited to PEZA- or BOI-registered enterprises. Export-oriented enterprises — including those without IPA registration — may now enjoy the same incentive, subject to strict compliance with the law and its implementing rules.However, broader access does not mean relaxed standards.The real challenge lies in sustaining compliance. VAT zero-rating today depends on consistent export performance, timely certification, proper documentation, and internal coordination. Enterprises that fail to meet the requirements risk losing the incentive in the succeeding year, with immediate implications on cost structures, cash flow, and commercial arrangements.Under CREATE MORE, VAT zero-rating remains a valuable incentive — but one that must be actively managed and continuously earned.Meynard Sardalla is a Senior Director from the Global Compliance & Reporting Sub-Service Line of SGV & Co.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.

27 April 2026

Noel Andro D. Bico

How tax and incentives policy responded to the energy shock

In brief:The government responded to the 2026 energy shock by suspending excise taxes on selected fuel products and extending tax filing deadlines to ease cost pressures and support cash flows. Flexible tax and incentives policies, including temporary work-from-home allowances for registered businesses, helped balance economic relief with regulatory accountability during the crisis.“Taken together, the coordinated actions of the BIR, FIRB, and related agencies reflect a pragmatic and measured response to a period of economic stress."In early 2026, the Philippines found itself at the sharp end of a global energy shock. Geopolitical conflict in the Middle East and the temporary closure of the Strait of Hormuz disrupted the global oil trade, sharply raising energy prices across global markets. For a country heavily dependent on imported fuel, the effects were immediately tangible: rising pump prices, increased transport costs, and a growing strain on energy intensive industries. In response, President Ferdinand “Bongbong” R. Marcos, Jr. declared a state of national energy emergency, enabling a coordinated government response under existing legal frameworks to manage risks arising from global energy supply disruptions.This article examines the various issuances and policy actions undertaken by key government agencies, including the Bureau of Internal Revenue (BIR) and the Fiscal Incentives Review Board (FIRB), to stabilize economic activity amid ongoing global energy market disruptions.Excise Tax Suspension as Fiscal InterventionA central element of the government’s fiscal response to high global oil prices was the temporary suspension of excise taxes on select petroleum products, implemented under a framework authorized by Republic Act (RA) No. 12316. The law empowers the President to suspend or reduce excise taxes on petroleum products when prescribed market conditions are present, allowing fiscal policy to respond quickly to extraordinary price shocks without needing new legislation.Pursuant to this authority, Executive Order (EO) No. 114, series of 2026, signed on 16 April 2026 and circularized by the BIR under Revenue Memorandum Circular (RMC) No. 031-2026 on 17 April 2026, temporarily suspended the imposition of excise taxes on liquefied petroleum gas (LPG) and kerosene, subject to specific exclusions, for a period of three months from its effectivity. LPG remains taxable when used as a petrochemical input or for motive power, while kerosene remains taxable when used as aviation fuel.This measure directly reduced retail fuel costs for households, small transport operators, and industries reliant on LPG and kerosene.To operationalize the EO, the BIR issued Revenue Regulations (RR) No. 3-2026, which prescribe the implementing rules, compliance guidelines, and administrative safeguards governing the excise tax suspension. RR No. 3-2026 expressly provides that the temporary excise tax suspension applies only to qualified petroleum products removed from the place of production or customs custody beginning 17 April 2026. This suspension is also subject to reinstatement upon the occurrence of certain conditions.To ensure proper implementation, RR No. 3-2026 imposes specific inventory submission and reportorial requirements. Concerned manufacturers, importers, and lessees of storage depots are required to submit duly notarized inventories of all covered petroleum products as of 16 April 2026. Withdrawal Certificates must likewise bear the annotation: “STOCKS COVERED BY EO NO. 114, SERIES OF 2026.”These requirements help protect government revenues, prevent the misuse or diversion of tax exempt fuel, and ensure that excise tax relief is applied only within the allowed scope and duration of the suspension. Overall, the excise tax suspension showed a careful and lawful use of fiscal flexibility. With clear rules under RR No. 3-2026, it provided targeted and time bound relief for LPG and kerosene during a period of elevated energy costs, while maintaining the integrity and enforceability of the excise tax system.Deadline extension as administrative reliefComplementing this fiscal intervention were administrative relief measures implemented by the BIR to ease taxpayer compliance. Consistent with its long standing practice during periods of disruption, the BIR issued RMC No. 030-2026 on 14 April 2026, extending the deadline for the filing and payment of 2025 annual income tax and the submission of the required attachments from 15 April 2026 to 15 May 2026, without the imposition of surcharges, interest, or penalties. Taxpayers were likewise allowed to file electronically and settle liabilities through both digital payment channels and Authorized Agent Banks (AAB), regardless of their Revenue District Office (RDO).This extension assisted businesses in preserving cash flows while operating and energy costs were rising. For many, particularly small and medium enterprises, the one-month deferral provided short-term breathing space to meet payroll and supplier obligations. Facilitation of fuel importation and logistics supportThe BIR also played a critical role in safeguarding fuel supply by facilitating the expedited importation of petroleum products, particularly in support of procurement activities undertaken by the Philippine National Oil Company–Exploration Corporation (PNOC EC). In March 2026, the BIR, through its Large Taxpayers Service (LTS), issued special permits to PNOC EC to fast track the emergency importation of petroleum products, effectively streamlining documentary and procedural requirements. The BIR worked closely with PNOC EC to ensure the timely processing of reportorial requirements to help speed up clearance for fuel imports. By supporting PNOC EC’s fuel procurement and import logistics, the BIR helped stabilize fuel availability, highlighting its role not only as a revenue collecting agency but also as an operational partner in broader economic stabilization efforts. This role is often overlooked but proved critical during the energy disruption.Temporary work from home arrangements for registered business enterprises (RBEs)Alongside the BIR’s measures, the FIRB adopted a complementary policy aimed at sustaining business operations under constrained conditions.This policy was set out in FIRB Resolution No. 005-26, effective 24 March 2026, which allowed RBEs in economic zones and freeports to temporarily adopt work from home (WFH) arrangements without losing their fiscal and non fiscal incentives. Under the Resolution, RBEs may adopt WFH arrangements for up to 90% of their workforce directly engaged in the registered project or activity. Investment Promotion Agencies (IPAs) may set a lower threshold where business operations require on site presence, provided that the percentage does not fall below 50%.A notable exception applies to RBEs in the Information Technology–Business Process Management (IT‑BPM) sector that maintain concurrent registration with the Board of Investments (BOI). These enterprises are not subject to the same on-site workforce limitations following the 2022 precedent under FIRB Resolution No. 026‑22 that allowed them to transfer their registration from an economic zone or freeport IPA to the BOI until 31 December 2022. This transition enabled them to adopt up to 100% WFH arrangements without compromising their fiscal incentives. Accordingly, RBEs with concurrent BOI registration may continue implementing full WFH arrangements, subject to BOI-specific terms and conditions.However, safeguards are built into the framework. RBEs that exceed the WFH threshold imposed by their concerned IPA are subject to regular income tax on the excess portion, computed by averaging all excesses made by the RBE in the month of non-compliance. Strict monitoring and compliance requirements also apply. RBEs must notify their respective IPAs, submit verified inventories of equipment used for WFH, and comply with controls governing the movement of assets outside economic zones. Notably, imported assets may be temporarily transferred only with prior approval and the posting of a surety bond equivalent to 150% of applicable duties and taxes. This ensures that fiscal incentives are not abused and that government revenues remain protected.The way forwardTaken together, the coordinated actions of the BIR, FIRB, and related agencies reflect a pragmatic and measured response to a period of economic stress. More broadly, these measures illustrate the evolving role of tax and incentives policy. Beyond revenue generation and regulation, these tools can serve as instruments of stabilization capable of responding quickly, within legal bounds, and in proportion to emerging challenges.As global disruptions become more frequent, the ability to deploy responsive yet accountable policy measures will be increasingly critical. The experience of 2026 offers a compelling case for adaptive tax and incentives governance — one that balances relief with responsibility, and agility with oversight – to foster resilience, sustain business confidence and support economic stability.Noel Andro D. Bico is a Senior Director from the Global Compliance & Reporting Sub-Service Line of SGV & Co. 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.

17 April 2026

Samantha Joy U. Cinco

Familiar banking risks return through new channels

In brief:Banking risk management is being shaped by interconnected risks driven by innovation, technological change, geopolitical instability, and the expanding role of private capital and non-bank finance. These forces blur the distinction between financial and non-financial risks and heighten vulnerability to shocks. As a backdrop to this, regulation is becoming increasingly fragmented and localized, adding to the overall complexity of the risk management landscape. Divergent interpretations of global standards for prudential, digital, AI, and sustainability regulations raise compliance costs, complicate risk measurements and aggregation, and constrain strategic planning. To manage risks, banks are shifting from a sole focus on capital strength toward a broader focus on resilience and capability building. “The banks that will be able to navigate these risks will not be the ones that control every risk, but those that build capabilities to anticipate change, identify transmission channels, and embed resilience in strategy, operations, and resources."Banking risk management is being shaped by threats that are non-linear, continually accelerated by technology and innovation, intensified by volatility, and tightly interconnected across markets, institutions, and jurisdictions. The recently published 15th annual EY/IFF Global Bank Risk Management Survey highlights this shift, which is influencing the agenda of chief risk officers (CROs) worldwide. The survey notes that traditional risks are making a comeback and the ways in which they emerge and transmit through banks have changed. Geopolitical tensions, technology and innovation, and the growth of private capital are also driving opportunities and exposures. At the same time, regulation is becoming more localized, increasing compliance and operational costs for banks. Together, these forces are reshaping the capabilities, resources, and strategies of banks as they navigate this landscape. This is the third article of the SGV Financial Regulatory Outlook series, which builds on insights from the SGV Knowledge Institute event titled “Global Shifts, Local Impact: Navigating the Next Wave of Banking Regulation.”Re-emerging top risks driven by innovation and macroeconomic forcesWith the promise of improved productivity, artificial intelligence (AI) is increasingly being deployed. Digitization has also allowed for better access to financial services, furthering financial inclusion for sectors of the economy that need it most. With this comes heightened concerns about cybersecurity, digital fraud, and financial crime, all reported in the survey as top risks for the world’s CROs. Additionally, geopolitical instability is seen as a powerful external force shaping risk management strategies. It moves through banks in interconnected chains. It first affects market sentiment, raising uncertainty and leading to changes in investor confidence. It then affects formal economic channels, whether through consequent trade or financial restrictions, or physical disruption. This leads to possible supply chain disruptions, rising levels of sovereign debt, a decline in aggregate demand, and an overall increase in prices that deter growth and trade. These risks then make their way into the balance sheet, affecting credit, liquidity, funding, and market risks – ultimately translating into pressure on capital adequacy. However, their impact extends beyond financial risks, also affecting overall operations and governance. In the Philippines, the recent geopolitical shock coming from the Middle East is already making waves through supply chain disruptions, placing upward pressure on the price of fuel. As a primary input, higher fuel prices will in turn increase the prices of necessities, leading to a budget squeeze and a fall in overall disposable income. Tighter budgets mean weaker debt-servicing capacity and overall credit demand. Over time, this materializes in the bank’s purview due to implications in asset quality, credit growth, and liquidity conditions. Lastly, credit risk is also making a comeback as a top concern through a combination of traditional financial concerns, rising defaults linked to geopolitical instability and market developments, and the rise of private credit. Private credit or non-bank financial institutions (NBFIs) have taken a more prominent role in the industry, raising concerns about the unregulated “shadow banking” system. In the Philippines, this is especially relevant given the rise of fintechs which, while expanding access beyond traditional financing, also expands the entities covered under non-bank finance to include startups that enable peer-to-peer lending, pool savings, and profit credit. The local environment is made even more complicated given the distinction between NBFIs with quasi-banking license (e.g. investment houses and trust companies) and those without (e.g. pawnshops and remittance companies). Regulatory fragmentation as a risk multiplierActing as an overlay to these top risks is the fragmented regulatory landscape. Global standards are being localized, leading to differing interpretations and implications. This is not only in prudential regulation, but also in the areas of AI, sustainable finance, digital assets, and payments. The shifting regulations highlight shifting priorities for localities while increasing complexities for multinational entities. According to the survey, regulatory fragmentation is seen to increase compliance and operational costs, exacerbate challenges in data management reporting, and lead to difficulties in risk aggregation and measurement. Banks will not only deal with the inherent risk of operations but also consider the costs and opportunities of doing business in specific countries or regions owing to diverging regulations. This confluence of changing top risks and regulation is pushing banks beyond balance sheet defense. Shifting strategies from strong capital to resilience and capabilitiesToday’s top risks are increasingly non-financial while also driving financial risks. Strong capital planning is indeed still necessary, but it is no longer sufficient on its own.The survey emphasizes increased resilience as a top strategy to manage geopolitical risks and diverging regulations. In the Philippines, the recent BSP Circular 1203 on Operational Resilience espouses a move beyond continuity planning, stressing the identification of critical operations and systems, mapping of dependences, definition of tolerances, scenario testing, and overall recovery capabilities. Moreover, managing this new complex risk landscape requires an emphasis on skills around new technologies as well as different team structures. According to the survey, top skillsets for risk management include digital acumen, adaptability to a changing risk environment, understanding the enabling role of risk management, having a deeper specialization in at least one domain, and critical soft skills such as leadership, communication, and collaboration. From risk awareness to risk strategiesThe risk landscape is being shaped not by a single shock, but by a convergence of multiple external shocks materializing through new and traditional risks. This is happening against a backdrop of increased regulatory fragmentation. As countries continue to prioritize localization, banks are managing compliance not as a set of global standards, but as a portfolio of specific local and regional regulations. Managing this complex environment requires a change in mindset. The banks that will be able to navigate these risks will not be the ones that control every risk, but those that build capabilities to anticipate change, identify transmission channels, and embed resilience in strategy, operations, and resources. This time is different. Resilience is not just about stability; it’s about sustained adaptability. Samantha Joy U. Cinco is a Financial Services Consulting Senior Director of SGV & Co. 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.

14 April 2026

Charisse Rossielin Y. Cruz and Eleonor L. Camot

Balancing growth, innovation, and trust in Philippine banking

In brief:Philippine and Asia‑Pacific banks are prioritizing growth and upside risk management while adapting to rapid digital transformation amid rising regulatory, technological, and competitive pressuresBanks must balance innovation with trust by strengthening governance, cybersecurity, operational resilience, and legacy systems, while adopting technologies such as AI and blockchain.Long‑term success depends on future‑ready skills, adaptive leadership, and a mindset that embraces continuous change while maintaining confidence among customers, regulators, and stakeholders.“By adopting adaptive operating models, innovation friendly risk frameworks, and a mindset that treats change as constant, banks can unlock upside opportunities while reinforcing long term trust from stakeholders."Asia Pacific (APAC) and Philippine narratives continue to be about growth and dealing with upside or growth risks, as opposed to downside risks that would correctly describe economies that went through crises. Banks continue to update their decision-support, compliance, and risk management models in parallel with their transformation and innovation initiatives while meeting heightened expectations from regulators, customers, and investors. To navigate this complexity effectively, a focused and balanced portfolio will enable banks to drive synergies across the organization and unlock value from upside risk opportunities. This requires a shift from merely mitigating risks to actively embracing upside potential, grounded in a strong foundation of trust. This is the second article of the Financial Regulatory Outlook series, which builds on insights from the SGV Knowledge Institute event titled “Global Shifts, Local Impact: Navigating the Next Wave of Banking Regulation.”The previous article presented insights from the EY Global Regulatory Outlook, which was issued against a backdrop of increasingly rapid technological innovation and a changing competitive landscape that is becoming more ecosystem-based and ‘friendlier’ to non-traditional players. This environment presents new risks for banks, particularly in relation to the digital world, with big tech companies and nimbler entrants threatening profitability and making the regulatory direction less clear. This underscores the need to create both regulatory and management frameworks that strike a balance between allowing for change and innovation while ensuring financial sector stability and protecting customers and the public. However, innovation in banking is inherently challenging. Banks operate within complex business models, rely heavily on legacy core systems, and are subject to intense regulatory scrutiny. These challenges can be understood through recurring paradoxes that banks must continuously manage. The resulting tensions drive the need for banks to have more adaptive and resilient models. Managing technology risk in a digital‑first environmentDigital transformation efforts will accelerate on multiple fronts during the next five years as banks continue to embrace widespread transformation programs to meet shifting customer needs, stay ahead of new competitors and achieve operational excellence. These efforts are closely aligned with the BSP’s overarching digital transformation strategy, which encourages financial institutions to shift toward digital-first banking to improve convenience, inclusion, and efficiency. At present, major banking institutions are actively integrating artificial intelligence (AI) for fraud detection and credit scoring, as well as blockchain payment rails to streamline operations and expand access to financial services. Despite the significant opportunities presented by digital innovation, cybersecurity and technology risks – including risks associated with the design, development, and deployment of digital systems and infrastructure – remain a top priority for banks. Bank leaders continue to be confronted with the risk-vs.-opportunity paradox, particularly around AI adoption: assessing whether AI will introduce new and complex risks or strengthen the bank’s ability to identify, manage, and mitigate risk more effectively.Recognizing both the promise and the risks of innovation, regulators have introduced measures such as the Financial Services Cyber Resilience Plan (2024–2029) to promote industry-wide coordination, enhance defenses against evolving cyber threats, and safeguard stakeholder trust.Balancing innovation and growth with trust, resilience, and regulatory compliance is critical to long-term success. Achieving this balance requires banks to design and adopt innovation-friendly governance frameworks, with clearly defined risk limits, accountabilities, and decision rights embedded directly into business-as-usual operations.Dual‑track technology transformation Robust and reliable technology is essential to enable successful banking transformation and sustain continuous innovation and growth. However, while the adoption of new technologies is critical, core banking system disruptions are unacceptable, given the “always on, always available” nature of banking services and the sector’s reliance on uninterrupted operations to maintain customer trust, financial stability, and regulatory compliance.Banks operate within highly complex and interconnected environments, often reinforced by legacy core banking systems that are deeply embedded in critical business processes. Beyond managing vast volumes of sensitive customer and transaction data, important business services depend on legacy platforms, layered architectures, and extensive policy frameworks. These interdependencies heighten the risk that system changes, upgrades, or migrations may disrupt critical services, making transformation initiatives particularly challenging.Philippine banks are increasingly adopting a dual-track approach to technology transformation, balancing the need to protect mission‑critical legacy systems while simultaneously deploying new digital capabilities. Under this model, banks deploy new digital tools to enhance existing systems through familiar channels and interfaces, minimizing disruptions to day-to-day operations and reducing change risks for both customers and employees. Similarly, legacy technology can be “wrapped” with new features, functionality, and AI-based user experiences without exposing the institution to the operational and regulatory risks of full system replacement — a key consideration in the Philippine regulatory environment.Building future‑ready talent As technologies continue to evolve at pace, banks must ensure their talent keeps up to sustain transformation momentum. People are at the core of successful transformation; hence, banks need to continuously upskill their workforce to adopt emerging technologies. According to the Global Bank Risk Management Survey 2024, the APAC region faces the most significant challenges in attracting and retaining cybersecurity talent. Digital growth across the region is accelerating faster than talent development, resulting in a widening skills gap. In the Philippines and other emerging markets, there is a strong foundation of technical talent, but capability gaps remain due to limited exposure to advanced cybersecurity roles, enterprise-scale environments, and governance, risk, and regulatory frameworks. Over the next five years, risk professionals anticipate the need for more specialized skill sets across both the first and second lines of defense to address increasingly complex and fast-evolving risks. Bank leaders must therefore proactively define the skills required for the future and implement a deliberate strategy to develop and acquire these capabilities while continuing to retain and strengthen expert talent in core areas.Workforce shifts are inevitable. As AI tools increasingly meet basic analytical needs and automate routine tasks associated with traditional risks, teams are expected to move from today’s pyramid (with more workers in junior roles) to tomorrow’s diamond shapes (with more senior-level specialists with stronger judgment, domain expertise, and decision-making capabilities). As this transition accelerates, leaders must also address widespread concerns about AI’s potential to replace jobs. Successfully navigating this shift will require clear communication, targeted upskilling, and a strong focus on redeploying talent toward higher-value activities.Driving organizational adaptability While technology enables transformation, its success in financial institutions ultimately depends on people and effective leadership. While investments in digital platforms, cybersecurity tools, AI, and data analytics are critical, their impact will remain limited unless organizational culture, leadership behaviors, and ways of working evolve in parallel. Transformation success ultimately lies in how people think, act, and collaborate.As Philippine regulations increasingly focus on technology risk, cyber resilience, data governance, ESG, and AI, the ability of banks to adapt is being tested beyond traditional compliance capabilities. Meeting these demands requires not only new tools and frameworks, but also greater agility, judgment, and cross functional collaboration across the organization.To succeed, leaders must enable people to work adaptively, experiment creatively and think differently. People and teams may need convincing that continuous improvement is a requirement for long-term success and that while change is difficult, its long term benefits far outweigh the short term disruption it creates.Sustainable growth through trusted innovationAs banks continue to pursue growth through rapid digital innovation, maintaining trust and resilience is more critical than ever. The industry’s path forward will be shaped by how effectively it manages the inherent paradoxes of innovation: adopting new technologies while protecting mission-critical systems, building future ready skills while retaining core expertise, and driving continuous change without eroding confidence among customers, regulators, and stakeholders. By adopting adaptive operating models, innovation-friendly risk frameworks, and a mindset that treats change as constant, banks can unlock upside opportunities while reinforcing long-term trust from stakeholders. Charisse Rossielin Y. Cruz is a Business Consulting Partner and the Insurance Sector Deputy Leader, and Eleonor L. Camot is a Financial Services Consulting Senior Director, both of SGV & Co.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 authors and do not necessarily represent the views of SGV & Co.

06 April 2026

Ruben D. Simon, Jr.

Navigating the new global norm in financial regulation

In brief:Regulatory divergence is accelerating globally, with the US easing supervisory transitions to support competitiveness and innovation while the EU and UK maintain a stability focused approach, creating operational complexities for multinational financial institutions.Asia-Pacific regulators are pursuing market specific, stability oriented strategies and domestic market development rather than mirroring Western regulatory shifts.Technology, operational resilience, consumer protection, and emerging systemic risks are reshaping oversight, as regulators strengthen frameworks around AI governance, digital assets, fraud prevention, financial crime compliance, and the growing interconnectedness of non bank financial institutions. “At this global crossroads, regulation is no longer merely a compliance exercise. It is now a strategic determinant of an institution’s competitiveness."The global financial system is entering a period of intense structural change driven by competing political priorities, technological disruption, and diverging regulatory philosophies. If past cycles of reform were characterized by coordination and standards-setting, the current environment reflects a more fragmented, multi polar world. This is evidenced by diverging perspectives on competitiveness and innovation between the United States, United Kingdom and the European Union, underpinned by recent geopolitical and trade policies. In the Asia Pacific region, regulators gravitate towards a more cautious stance to develop their respective markets. While this is the case, there has been a common theme emerging from the current shakeup caused by the conflict in the Middle East that has caused direct impacts to energy security across the globe. Regulators are imploring financial institutions to tighten their respective scenario stress testing exercises to make sure their capital buffers are resilient enough, and calling for increased vigilance on energy shock-induced inflation, supply chain disruptions and their impact on their respective portfolios. In this situation, institutions operating cross-border transactions and those that have operations in different jurisdictions must now navigate a landscape where rules are increasingly diverging. The EY 2026 Global Financial Services Regulatory Outlook highlights this shift, along with the implications for supervision, risk management, and long-term competitiveness of financial institutions. This is the first article of the Financial Regulatory Outlook series, which will discuss insights from the SGV Knowledge Institute event titled “Global Shifts, Local Impact: Navigating the Next Wave of Banking Regulation.”Regulatory fragmentation widens as US and EU pursue divergent agendasGlobal financial regulation is becoming increasingly fragmented as major economies adopt contrasting approaches to competitiveness, innovation, and systemic oversight. The US is moving towards easing supervisory oversight focusing on capital rules, supervisory methodology, decreasing barriers to innovation, and an increased openness towards mergers and consolidation among major US Banks. This supervisory shift signals that the US is prioritizing economic expansion and domestic competitiveness over multilateral alignments that were emphasized after the Global Financial Crisis. Meanwhile, the EU and the UK are pursuing growth agendas of their own, but one anchored in maintaining stability within the existing regulatory architecture. The bloc’s decision to delay the Fundamental Review of the Trading Book (FRTB) to 2027 reflects its cautious stance, prioritizing prudential safeguards despite market and geopolitical pressures. This divergence in regulatory direction creates operational challenges for multinational banks, wherein institutions operating across the US and EU face significant asymmetries in capital requirements, reporting timelines, and supervisory expectations. As global standard setters avoid intervening in these geopolitical drivers, firms must adapt to a regulatory landscape where policy alignment is no longer guaranteed. This regulatory fragmentation appears to be the new norm rather than a transitory cycle while institutions wait for the current geopolitical uncertainties to subside.Asia-Pacific adopts market-focused, stability-oriented regulatory strategies In the Asia-Pacific, regulators are pushing for a more independent trajectory, guided by the US push for lesser stringent regulatory supervision and more by domestic priorities in innovation, regional competitiveness, and financial stability. Hong Kong and Singapore continue to lead in digital assets and sustainability standards, reflecting their continuous push for regional financial regulatory leadership. Their regulatory stance pairs innovation with strong safeguards that heavily focuses on risk assessment, operational resilience, and capturing cross border flows. Meanwhile, India is pursuing rapid financial sector development, implementing measures to boost domestic capacity and build a modern regulatory foundation suited to its expanding economy. On the other hand, Japan is emphasizing trust and system security while strengthening regional financial functions, signaling a preference for stability and predictability. Australia stands as a cautious outlier, closely tracking artificial intelligence (AI) governance and digital asset developments abroad as it evaluates potential reforms domestically. Despite their varied approaches, APAC regulators share a common orientation: to maintain resilience amid geopolitical uncertainty. Many jurisdictions are tightening cyber and operational standards, as seen in the EU aligned Digital Operational Resilience Act (DORA) efforts and new oversight regimes for critical third party service providers. This regional focus on digital resilience and local market strengthening underscores a broader shift where the Asia-Pacific is not reacting to Western recalibrations, but designing frameworks tailored to its own structural needs and competitive aspirations.Emerging risks: Technology, digital assets, and operational resilience redefine oversight Across global markets, regulators are increasingly concerned about risks arising from fast-moving technological adoption, the expansion of digital assets, and growing dependence on third party service providers. AI remains a focal point of regulatory inconsistency, with more than 40 jurisdictions issuing guidance or conducting supervisory exercises while applying different expectations around transparency and model governance. Firms now must manage dual risks in this area as well as risks arising from AI used in operations and from AI deployed in compliance functions. Digital assets, particularly stablecoins, are prompting varied responses worldwide. The US Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act introduces a federal framework emphasizing reserve backing and redemption rights, while Hong Kong, Japan, the EU and UK advance licensing and supervisory regimes customized for their markets. These diverging views are expected to accelerate jurisdictional regulatory arbitrage and reshape business models for digital native firms. Operational resilience has also become a supervisory priority. The EU’s DORA regime, the UK’s Critical Third Parties (CTP) framework, and Canada’s operational resilience deadlines all reflect rising concerns about the systemic risks tied to digital infrastructure. Regulators are increasing scrutiny of critical third party technology providers and intensifying scenario testing. As geopolitical uncertainty heightens vulnerability exposures, firms must build robust, technology driven controls to withstand disruptions and safeguard business continuity.Focus on consumer protection, risk governance, and NBFIsRegulators worldwide are strengthening oversight aimed at protecting consumers, enhancing governance, and monitoring emerging threats from non-bank financial institutions (NBFIs). The increasing occurrence of fraud, particularly through digital channels, has led to tougher monitoring, expanded liability expectations, and new obligations for platforms and payment service providers. The UK Financial Conduct Authority’s Consumer Duty continues to influence global standards, with Singapore, Japan, and New Zealand introducing parallel regimes emphasizing fair treatment, transparency, and enhanced complaint handling. At the same time, supervisors are devoting attention to NBFIs, whose increasing interconnectedness with the regulated banking system raises systemic concerns. The UK’s System-Wide Exploratory Scenario and France’s stress testing exercises reflect efforts to map vulnerabilities in markets where leverage or liquidity mismatches could spill over into traditional finance infrastructure.The current geopolitical situation has seen a rise of sanctions and asset freezes, and financial crime regulations are expected to continuously evolve. This gives rise to inconsistent reportorial requirements in different jurisdictions. While the EU’s Anti-Money Laundering Authority (AMLA) is expanding direct supervision and the Monetary Authority of Singapore (MAS) requires stricter reporting standards, the US Financial Crimes Enforcement Network (FinCEN) has amended its rule on beneficial ownership: foreign entities registered to do business in the US are required to report but are exempt from reporting US citizens as beneficial owners. These are just some of the differing levels of AML compliance that multinational financial institutions operating in different jurisdictions must contend with, and they should have institutional agility to comply.The road aheadThe regulatory landscape entering 2026 is unlike any in recent memory. It is no longer defined by synchronized reforms, and it is increasingly shaped by national priorities, global geopolitical tensions, and rapid technological change. For financial institutions, success will depend on how agile these institutions are in building robust compliance frameworks, strengthening risk governance, and anticipating divergent rules before they materialize.At this global crossroads, regulation is no longer merely a compliance exercise. It is now a strategic determinant of an institution’s competitiveness. Firms that understand this shift and adapt accordingly will be best placed to navigate this new global norm in financial regulation. In the next part of this Financial Regulatory Outlook series, we will be discussing local insights and how Philippine financial institutions will be affected. Ruben D. Simon Jr. is a Financial Services Consulting Senior Director of SGV & Co.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.

30 March 2026

Rossana A. Fajardo

The SGV journey toward inclusive leadership and empowerment

In brief:SGV & Co. advances women leaders through a strong meritocratic culture, resulting in a leadership bench where women have actively helped shape the Firm’s direction.The Firm’s efforts highlight that inclusiveness is vital for a thriving future, demonstrated through impactful initiatives empowering women and girls in historically underrepresented areas.Equally vital to the ongoing journey towards equity are the male allies and supporters whose shared goals and mutual respect strengthen and amplify these efforts.“For the women leaders who have risen through the Firm’s ranks, and for those who will follow, the message is clear: capability remains the currency of advancement."In an industry where leadership development and career pathing have traditionally been narrow, SGV & Co. has built something more enduring and increasingly relevant. The Firm has long treated meritocracy as an operating principle. The result is a leadership bench where women have advanced and actively help shape its direction.This International Women’s Month, we celebrate the women honored as leaders and changemakers, exemplifying power that nurtures, uplifts, and transforms lives with grace and purpose. Their leadership guards legacies and guides future generations with courage and compassion, built on a foundation of meritocracy that SGV has always upheld.Women setting the paceSGV’s record on women leadership was built over decades by individuals who navigated, and often remodeled, the structural barriers of their time. Erlinda T. Villanueva’s appointment as SGV’s first female partner in 1961 signaled a shift that would resonate for decades. It demonstrated that advancement within the firm was anchored in performance, not precedent. The rise of Gloria L. Tan-Climaco to become the firm’s first woman Chair and Managing Partner marked a defining moment. Her recognition as both a Young Lady Achiever in Public Accounting and an Outstanding CPA in Public Accounting from the Philippine Institute of Certified Public Accountants reflected a career grounded in technical excellence and credibility. Her subsequent role advising former President Gloria Macapagal Arroyo on strategic initiatives underscored the broader influence SGV leaders would wield. SGV Senior Consultant Delia Domingo Albert followed a similarly expansive path. As former Secretary of Foreign Affairs and Philippine Ambassador, she brought institutional discipline to the global stage. Her tenure included serving as chair of the United Nations Security Council in 2004, where she championed the role of women in peacebuilding. Her career has since become a template for leadership that crosses sectors while consistently advocating gender equity. These women leaders did more than succeed individually. They embodied the values of integrity and excellence that the Firm’s founder, Washington SyCip, built the firm upon. Today, women make up the majority of SGV’s workforce and more than half of its Partners and Principals. Meritocracy by designAt SGV, meritocracy is part of the organizational infrastructure. From recruitment to promotion, the firm has relied on performance metrics, technical proficiency, and leadership potential as its primary filters. Advancement is neither automatic nor arbitrary.This philosophy is reinforced through deliberate investments in mentorship and professional development. Programs ensure that high-potential employees, regardless of gender, gain access to sponsors, stretch assignments, and leadership exposure. Over time, this has produced a steady influx of women leaders who are not only qualified but also well-suited for the positions.The result is an organizational culture that is both competitive and collaborative. Individuals are encouraged to excel and contribute to the firm’s collective strength. For women professionals steering through a historically male-dominated industry, this environment has been significantly influential.Impactful initiatives to empower and upliftThe Firm takes pride in the progress it has made in its ongoing journey toward equity. Its efforts serve to underscore that inclusiveness is essential to shaping a future where everyone can thrive. These efforts include a range of impactful initiatives designed to empower and uplift women and girls, particularly in areas where they have been historically underrepresented.One such initiative is the EY STEM Program, which equips girls aged 13 to 18 with future-ready STEM skills through a free, gamified app. This innovative approach builds confidence and curiosity in science and technology, engaging 600 students during its first local launch at one high school. The program has inspired many young Filipinas to explore STEM fields and is set to expand its reach in 2026 through a new memorandum of agreement with the school’s LGU. This expansion aims to bring STEM opportunities to more public schools, empowering even more young women to pursue careers in science and technology.Complementing this is the EY Women in Tech (WiT) program, which SGV participates in as a member firm of EY. This global initiative was established by EY in 2020 to empower girls and women to enter, remain, and lead in the technology sector. Serving as an umbrella network of over 40 regional and competency-based WiT communities across the EY network, the program connects members, shares best practices, and fosters a strong sense of community. Open to everyone regardless of gender, rank, or professional background, WiT encourages participation in both global and local events that promote learning, inclusiveness, and career growth within the technology space.Further strengthening SGV’s commitment to gender equality is the Gender Equality Assessment, Results, and Strategies (GEARS) Program. Building on the Firm’s distinction as the first professional services firm in the Philippines and Southeast Asia to receive the EDGE Assess-level certification, GEARS enables the Firm to measure its progress and continuously enhance gender equality in the workplace. This program reflects the Firm’s dedication to creating an equitable environment where all employees can thrive.Together, these initiatives highlight the Firm’s holistic approach to inclusiveness, ensuring that equity is not just an aspiration but a lived reality for women and girls across all levels and sectors.A pragmatic blueprint for leadersThe SGV model offers a pragmatic blueprint for business leaders. While essential, meritocracy is not sufficient on its own. Without conscious efforts to eliminate systemic barriers, organizations risk underutilizing significant portions of their talent pool.Embedding inclusiveness into leadership training is a critical first step. Bias, often subtle and unintentional, can accumulate into structural disadvantage if unchecked. Equally important is cultivating mentorship and sponsorship networks. At SGV, these have been instrumental in bridging the gap between potential and opportunity, especially for younger professionals. Transparency plays a pivotal role as well. Setting clear diversity targets and holding leadership accountable ensures that progress is visible and sustained.Finally, flexibility should be viewed as part of the policy, and not just a perk. In a global talent market, accommodating diverse needs can be a decisive differentiator.Collaboration across all gendersAs SGV celebrates its 80th anniversary, it is important to see the bigger picture: SGV’s story is ultimately one of continuity. The firm’s early commitment to meritocracy laid the foundation for a leadership culture that could evolve without losing its identity. Today, SGV is extending that legacy into a more complex and demanding era, shaping it in its own image. For the women leaders who have risen through the Firm’s ranks, and for those who will follow, the message is clear: capability remains the currency of advancement. In a system that increasingly values inclusiveness, that currency now circulates more freely. In celebrating International Women's Month, it is important to recognize that true progress toward equity and empowerment is achieved through collaboration across all genders. Equally vital to this journey are the male allies and supporters whose shared goals and mutual respect strengthen and amplify these efforts. Together, women and men stand united, building a brighter, more inclusive future. This collective commitment ensures that the impact made today will inspire lasting positive change for generations to come.Rossana A. Fajardo is the Chairman and Country Managing Partner of SGV & Co.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.

17 March 2026

Noel P. Rabaja and Christine Rose L. Lapada

The Next Move: Reshaping strategy through AI

In brief:Philippine CEOs are advancing transformation agendas to sustain growth and competitiveness in a rapidly digitalizing market.AI and digital technologies are becoming central to strategic decision‑making as leaders recalibrate investments amid global shiftsGovernance, capability building, and strategic transactions are emerging as critical levers for CEOs preparing for the next phase of enterprise reinvention.“As AI becomes increasingly central to strategy, one message is clear: the next phase of growth will belong to companies that embed AI at the core of their business, enabling not only operational efficiency but enterprise‑wide reinvention."Philippine CEOs are entering the next phase of transformation with a clearer mandate: to convert measured optimism into decisive, capability‑building action. As digital acceleration and geopolitical shifts redefine the competitive landscape, leaders are anchoring their strategies on modernization, strengthened governance, organizational resilience, and AI‑driven reinvention. At the same time, they are leveraging strategic transactions to reshape portfolios, reinforce competitive positioning, and unlock new avenues for sustainable growth.The first part of this article discussed how Philippine CEOs face a complex economic and technological landscape marked by measured optimism amid global uncertainty, with AI readiness emerging as a critical priority for competitive advantage and growth.The second part of this article will discuss how Philippine CEOs are advancing transformation agendas focused on modernization, AI integration, governance, and strategic transactions to sustain growth and competitiveness amid a rapidly digitalizing and geopolitically shifting market.Transformation intensifies as CEOs pursue growthPhilippine CEOs are accelerating their transformation agendas in 2026 as they work to sustain growth in an increasingly digitalized market. Revenue growth remains their top priority, with 65% placing top‑line acceleration at the core of their strategic agenda.At the same time, CEOs maintain a balanced mix of ambition and measured optimism, showing strong confidence in their competitive positioning as they invest in digital tools, deepen customer engagement, and strengthen workforce capabilities. This momentum carries into their operational focus. Although operational optimization ranks as the second‑highest priority at 53%, only one‑third of CEOs are very confident in fully achieving this goal — underscoring the inherent complexity of transforming processes, improving efficiency, and integrating new technologies at scale.This more cautious sentiment around operational transformation contrasts with the stronger confidence CEOs express in people‑ and customer‑centric outcomes. A notable 75% are very confident in improving employee engagement and retention, while 66% report the same level of confidence in strengthening customer engagement. These perspectives reinforce a consistent theme: people and customer experience remain foundational to long‑term competitiveness, even as organizations push forward with broader enterprise transformation.As organizations lean more heavily on technology to enable these ambitions, the growing role of AI introduces both new possibilities and new pressures. Yet despite AI’s rising strategic importance, execution challenges continue to temper expectations. A net 46% of CEOs currently view AI outcomes unfavorably, reflecting a persistent gap between ambition and realized value. Additionally, 28% cite the rapid pace of technological change as a key barrier to effective integration and long‑term sustainability. Still, momentum is building. Despite the implementation hurdles many CEOs face, the survey shows that leaders continue to view AI as a critical driver of business success in the years ahead. Nearly half of CEOs have already implemented significant transformation initiatives, and their expectations for AI’s impact further reinforce this momentum: 12% anticipate AI to be truly transformative, and 42% expect it to deliver significant improvements across their organizations. As AI becomes increasingly central to strategy, one message is clear: the next phase of growth will belong to companies that embed AI at the core of their business, enabling not only operational efficiency but enterprise‑wide reinvention. This growing momentum reflects the measured optimism taking shape in Philippine boardrooms—confidence grounded not in assumption, but in deliberate, forward‑looking action.CEOs recalibrate investment amid geopolitical shiftsGeopolitical and trade policy developments have prompted Philippine CEOs to recalibrate their investment strategies. Over the past year, many leaders adjusted their plans — 42% accelerated a planned investment in response to global shifts, while others delayed or halted initiatives as part of a disciplined reassessment. Rather than pull back, CEOs repositioned by relocating operational assets, shifting suppliers, entering new markets, or exiting unviable ones, underscoring a deliberate effort to reinforce resilience while protecting growth momentum.CEOs are now prioritizing levers they can directly influence, with 32% identifying AI and digital technologies as their most important strategic response — well ahead of supply‑chain diversification or market realignment. By contrast, engaging policymakers registered a –16% net importance, signaling a preference for internally driven, high‑impact actions.Governance strengthens as AI adoption acceleratesAs AI adoption deepens, governance is becoming a central priority for Philippine CEOs. As much as 68% now report clear C‑suite or board‑level accountability for AI outcomes, signaling a shift toward stronger oversight, clearer ethical guardrails, and enterprise‑wide alignment. Leaders increasingly recognize that AI is not simply a technological upgrade; it is a strategic capability requiring transparency, responsible design, and disciplined execution.Expectations for AI’s impact vary, but momentum is evident. 54% of CEOs anticipate that AI will drive major improvements and become a key determinant of business success, while 22% expect benefits limited to specific functions and another 22% foresee only incremental gains. These differing views highlight a leadership climate that is optimistic but pragmatic — pursuing AI’s potential while carefully managing capability readiness, risk, and pace of change.Philippine CEOs use strategic transactions to strengthen positioningStrategic transactions are gaining importance as CEOs reshape portfolios and pursue new pathways for value creation. More than half at 54% plan to actively pursue deals in the next year, with 34% specifically considering mergers, acquisitions, or strategic partnerships. Leaders are placing strong emphasis on operational optimization within their acquisition and divestment strategies, underscoring a disciplined approach to strengthening enterprise performance.Among CEOs actively evaluating opportunities, 65% expect acquisition activity to accelerate revenue growth, reflecting the role of M&A in reinforcing growth and productivity. Cost optimization remains a dominant theme, with 70% identifying cost reduction as essential to competitiveness. Confidence in the domestic market is also firm, as 72% of CEOs plan to invest capital in the Philippines — reinforcing the cautiously optimistic sentiment shaping strategic decisions across the business community.AI at the center of enterprise strategyAs CEOs look to 2026, their strategies reflect a renewed sense of purpose grounded in the same measured optimism shaping the broader Philippine business landscape. Leaders are sharpening priorities, accelerating modernization, and elevating governance as they navigate a rapidly evolving environment. AI and digital capabilities have shifted from promising enablers to core strategic drivers — reshaping how organizations invest, compete, and grow.The next move for Philippine CEOs is unmistakable: modernize systems, build future‑ready talent, and embed AI at the center of enterprise strategy. Those who act decisively today will not only chart the next phase of their organization’s growth — they will help define the direction and competitive strength of Philippine enterprise in the years ahead.Noel P. Rabaja is the Deputy Managing Partner, Strategy and Transactions Leader, and Markets Leader, and Christine Rose L. Lapada is a Strategy and Transactions Associate Director, both of SGV & Co.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 authors and do not necessarily represent the views of SGV & Co

16 March 2026

Noel P. Rabaja and Christine Rose L. Lapada

The Next Move: Reshaping strategy through AI

In brief:Measured optimism defines 2026 as CEOs balance domestic confidence with global uncertainty and rising cost pressures.AI readiness becomes the decisive priority, with national assessments highlighting both urgency and opportunity for Philippine enterprises.The advantage goes to the prepared enterprises that upgrade systems, invest in skills, and build digital strength to lead the next wave of growth.“AI readiness is no longer optional — it is the defining advantage for Philippine enterprises in 2026, and it is rapidly becoming the differentiator that sets industry leaders apart."With 2026 reshaping competitive realities at unprecedented speed, Philippine CEOs face a strategic landscape where decisions carry amplified impact. Insights from the Philippine edition of the 2026 CEO Outlook Pulse Survey, gathered from CEOs across the country’s major sectors, reveal how enterprises are rebalancing portfolios, accelerating AI integration, and strengthening resilience amid ongoing uncertainty. In today’s NAVI world, where change is nonlinear, accelerated, volatile and interconnected, these insights offer Philippine business leaders a sharp lens into how organizations are adapting to rapid and interconnected change. AI readiness is no longer optional — it is the defining advantage for Philippine enterprises in 2026, and it is rapidly becoming the differentiator that sets industry leaders apart.Economic pressures reshaping CEO prioritiesPhilippine CEOs enter 2026 facing economic pressures that mirror those of the previous year, now intensified by geopolitical dynamics and accelerating technological change. The World Uncertainty Index indicates that global uncertainty remains elevated due to persistent geopolitical tensions and volatile trade policies—conditions that continue to affect cost structures, capital allocation, and long‑term planning. Domestically, concerns around fiscal governance persist, weighing on investor confidence and contributing to a more cautious business outlook.These combined forces have shaped the country’s recent economic performance. Philippine GDP slowed from 5.7% in 2024 to 4.4% in 2025, falling short of the government’s minimum target of 5.5%, as noted in the Development Budget Coordination Committee’s review of medium‑term macroeconomic assumptions. Meanwhile, the Bangko Sentral ng Pilipinas, in its February 2026 briefing, projected a modest recovery to 4.6% in 2026 and 5.9% in 2027 — projections that hinge on strengthened governance and renewed investor trust.While the macroeconomic environment remains constrained, the technology landscape is advancing at a pace that demands CEO‑level attention. Global competition is accelerating investment in artificial intelligence (AI), creating meaningful openings for economies that modernize quickly — and exposing vulnerabilities in those that lag.AI readiness and structural gapsThe 2025 UNESCO AI Readiness Assessment Report notes that the Philippines has made real progress in building responsible, ethics‑driven AI governance. Yet the same assessment underscores structural gaps that now carry strategic consequences: weaknesses in digital infrastructure, limited R&D investment, siloed policymaking, inconsistent public–private collaboration, and shortages in critical technology skills. As AI becomes a core driver of competitiveness, these gaps must be addressed with urgency.Reinforcing this, the 2025 Government AI Readiness Index by Oxford Insights ranks the Philippines 43rd among 195 economies, reflecting improved policy direction, governance, and public‑sector readiness. For enterprise leaders, this signals that government has largely set the foundation; the real challenge now lies in execution, specifically, scaling AI with speed, discipline, and measurable business outcomes.One of the speakers at the 2026 Philippine CEO Outlook event from the Asian Development Bank underscored the scale of the country’s AI opportunity. Citing Public First’s Turbocharging Growth: The Philippines’ AI Opportunity, they highlighted that today’s AI technologies could significantly augment roughly 37% of Filipino workers, driving substantial productivity gains and enabling higher incomes. The message to CEOs is direct: AI is no longer merely an operational enhancement — it is a national productivity catalyst.Global insights further reinforce the urgency of enterprise‑level action. The World Economic Forum’s Future of Jobs Report 2025 identifies AI and information technologies as the strongest forces reshaping business models worldwide, while Microsoft’s Work Trend Index 2025 notes that although awareness of AI is rising, many organizations remain underprepared for transformation at scale.This readiness gap is even more pronounced in the Philippines. The Philippine Institute for Development Studies (PIDS), in its 2024 study Readiness for AI Adoption of Philippine Business and Industry, found that only 14.9% of local firms are currently using AI, with adoption concentrated among digitally mature ICT and BPO organizations. PIDS emphasized that industry‑wide AI uptake continues to be limited by infrastructure gaps, low levels of awareness, constrained investment capacity, and widespread shortages in critical digital skills. The study also cited the Salesforce Asia Pacific AI Readiness Index, where the Philippines scored 25.4 out of 100 in Business AI Readiness — ranking 10th out of 12 economies, well behind regional leaders such as Singapore, China, and South Korea.This signals a substantial opportunity for Philippine enterprises to accelerate AI capability and strengthen their competitive position in the region. As highlighted by the Global Consulting Markets Leader at Ernst & Young during the 2026 Philippine CEO Outlook event, AI offers a genuine productivity leapfrog opportunity for companies that act decisively. He underscored that realizing this potential will depend on CEOs modernizing legacy systems and rethinking enterprise capabilities to overcome entrenched barriers that hinder transformation.Philippine CEOs enter 2026 with measured optimismThe CEO Outlook Pulse Survey shows that Philippine business leaders enter 2026 with measured optimism. While 48% express net optimism about business prospects, sentiment remains nuanced. Leaders retain confidence in domestic and sector‑specific performance yet remain cautious about global conditions and persistent cost pressures. The 2026 CEO Confidence Index registered a score of 59, down from 74 the previous year — a reflection of sourcing challenges, rising operational costs, and continuing uncertainty. Even with this softer sentiment, CEOs still anticipate improvements across key metrics: 64% expect revenue growth, 54% foresee stronger profitability, and 64% project productivity gains, with 26% pointing to meaningful efficiency improvements.Executives remain confident but deliberate in capital deployment. Net optimism of 46% for revenue, 42% for competitiveness, and 36% for investment in existing operations signals a clear emphasis on strengthening core capabilities. Expansion plans, technology investments, and R&D spending are being paced with greater discipline, shaped by pressures around input costs, limited cost‑through mechanisms, and tighter cash flow.Cost pressures continue to loom large, with 42% of CEOs expecting operating expenses to rise due to supply‑chain disruptions, higher input prices, and labor market tightening. Leaders are accelerating efficiency, digital adoption, and reskilling to manage cost pressures and reinforce organizational resilience.Clear-sighted and transformative leadershipThis direction aligns with the International Monetary Fund’s view in Gen‑AI: Artificial Intelligence and the Future of Work, which notes that economies with strong digital foundations and adaptable labor markets are best positioned to benefit from AI while managing disruption. The Philippines’ ASEAN Chairmanship in 2026 further amplifies this opportunity, positioning the country to help shape regional digital priorities that will define the operating environment for CEOs in the years ahead.As Philippine CEOs move through 2026, the realities of a NAVI world demand leadership that is clear-sighted and transformative. This moment is both a signal and mandate: business leaders who modernize core systems, build future-ready talent, and strengthen digital foundations will be best positioned to turn uncertainty into advantage — driving growth while advancing the country’s competitiveness in a rapidly shifting region. The second part of this article will discuss how Philippine CEOs in 2026 are advancing transformation agendas focused on modernization, AI integration, governance, and strategic transactions to sustain growth and competitiveness amid a rapidly digitalizing and geopolitically shifting market.Noel P. Rabaja is the Deputy Managing Partner, Strategy and Transactions Leader, and Markets Leader, and Christine Rose L. Lapada is a Strategy and Transactions Associate Director, both of SGV & Co.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 authors and do not necessarily represent the views of SGV & Co

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