If you’ve ever run a small business — whether it’s your mom’s sari-sari store that grew into a mini café or your passion project-turned-boutique — you’d know how much paperwork haunts the “entrepreneurial dream.” One of the scariest? The audited financial statement (AFS).

That thick pile of numbers reviewed by a CPA, signed, sealed, and delivered to the SEC. For most MSMEs, it feels like bringing your wallet to a hospital check-up — you never leave without losing something.

But here’s the tea: The Securities and Exchange Commission (SEC) wants to exempt micro, small, and medium enterprises (MSMEs) from this AFS requirement. Yes, you read that right — no more “auditor-approved” papers for small players.

What’s Changing

The SEC is proposing to let smaller companies submit only “unaudited” financial statements instead of paying for a full-blown audit.
Why? Because audits are expensive.
How expensive? For some small shops, an audit can cost as much as their monthly rent — or worse, their entire net income for a quarter.

So imagine you’re running a café or a small construction firm. You’re already dealing with fluctuating prices, permits, and payroll. Then comes audit season — and there goes your profit.

The SEC Chair, Emilio Aquino, said it straight: the goal is to help ease the financial burden on smaller businesses and encourage more entrepreneurs to register properly with the agency. Think of it as unclogging the system — fewer barriers, more compliance.

What the Guidelines Say

Now, before you pop the champagne, there’s fine print.

The exemption won’t be a “one-size-fits-all.” The SEC plans to set thresholds — possibly based on revenue, assets, or business size — to determine who qualifies as an MSME.
So if you’re a microbusiness earning ₱3 million a year or less, you’re probably safe. But if you’re running a “small” enterprise that’s secretly earning like a medium one, don’t expect a hall pass.

And yes, the move still has to go through public consultations and inter-agency coordination with the Department of Trade and Industry (DTI) and the Bureau of Internal Revenue (BIR). Translation: it’s not yet official, but the conversation has started — and it’s looking promising.

What This Means for MSMEs

At first glance, this could be a breath of relief — a long-awaited “thank you” for every small business that’s been trying to stay afloat post-pandemic.

But here’s where it gets interesting. While it may reduce the cost of compliance, it could also reduce the credibility of small businesses when applying for loans or investor funding.
Banks and investors love seeing an AFS because it’s verified by professionals. Without it, some might raise eyebrows — or worse, close their doors.

So it’s a trade-off: affordability versus accountability.

The Bigger Picture

This move reflects something deeper: a push toward a friendlier business environment for the smallest players — the backbone of the Philippine economy. MSMEs make up 99.5% of all businesses in the country, employing over 60% of the workforce.

And yet, they’ve often been buried under the same paperwork as giant corporations. The SEC’s proposal is a recognition that not everyone can afford to play by “big company” rules.

The Real Question

If this pushes through, it could be the start of a new era — one where being “small” isn’t a bureaucratic disadvantage.
But it also raises an important point:
Should financial transparency depend on how big you are?
Or should the system evolve to make transparency accessible instead of expensive?

Until the SEC finalizes the guidelines, small business owners will be watching — calculators in hand, hoping for a rulebook that finally understands their hustle.

Because sometimes, what MSMEs need isn’t another audit — it’s a little trust, clarity, and a system that scales with their dreams.