Question & AnswerQ&A (EXECUTIVE ORDER NO. 707)
An appraiser, also known as valuer, is a Filipino citizen who possesses the necessary qualifications, license, ability, and experience to execute the valuation or appraisal of an asset.
Public companies and secondary licensees of the Commission, including their significant subsidiaries, issuers of securities to the public, and entities adopting the fair value model under PFRS must engage SEC-accredited appraisal companies or PSOs depending on the asset involved.
Appraisers must be licensed and registered by the PRC and PRBRES pursuant to R.A. No. 9646, must be executive officers or directors of the applicant, members in good standing of a registered property appraiser association, have at least 5 years of regular property valuation experience, comply with CPE, and be covered by professional indemnity insurance.
Accredited entities must strictly observe a Code of Ethics, indicate specific information in appraisal reports (e.g., company and appraiser details, purpose, adoption of IVS or PFRS), and maintain qualifications such as 100% Filipino ownership, adequate personnel, unimpaired capital, internal controls, and professional liability insurance.
Penalties vary but include denial of approval of consideration for asset exchanges, fines up to 1/10 of 1% of the carrying amount of property transferred, and administrative sanctions under Section 54 of the SRC.
Failure to comply with prescribed qualification and documentary requirements under the Guidelines is a valid ground for denial of accreditation.
Not less than Five Million Pesos (P5,000,000.00), or a higher amount as prescribed by the Commission based on future assessments.
The report must indicate whether the appraisal company or PSO has considered the appraisal or fair valuation requirements of the client’s primary regulator, such as Bangko Sentral ng Pilipinas for banks.
Penalties start with fines of Fifty Thousand Pesos (P50,000), doubling for second offenses, with potential suspension for one year and eventual revocation of accreditation for repeated violations.
They must submit an annual report (SEC Form AC-AR) within 105 days from fiscal year-end, signed by authorized officers, which includes lists of licensed appraisers/valuation specialists, client engagements, financial information from audited statements, and other material operational information.