PRESIDENT Ferdinand R. Marcos, Jr. directed the Securities and Exchange Commission (SEC) to streamline its processes and slash transaction costs to support the implementation of the Capital Markets Efficiency Promotion Act (CMEPA) that took effect on Tuesday.
鈥淭o ensure the successful implementation of this reform, I direct the SEC to streamline its procedures, remove bureaucratic bottlenecks, (and) reduce transaction costs within its control,鈥 Mr. Marcos said at the Philippine Stock Exchange (PSE) in Bonifacio Global City.
鈥淯ndertake the necessary changes to fulfill your responsibilities in these changing times,鈥 he added.
The President on Tuesday attended the special bell-ringing ceremony at the PSE to mark the effectivity of Republic Act No. 12214 or CMEPA.
Signed by Mr. Marcos on May 29, one of the law鈥檚 provisions is the reduction of the stock transaction tax (STT) to 0.1% from the previous 0.6%, a move that is expected to boost stock market activity.
鈥淔or a first-time investor buying a P10,000 worth of stock, this means paying P10 in tax instead of P60. This will encourage more Filipinos to invest in our capital market,鈥 Mr. Marcos said.
鈥淏efore this law, investing in stocks meant paying a tax of 0.6%, six times higher than our neighbors in Singapore and Malaysia, and certainly the highest in ASEAN (Association of Southeast Asian Nations),鈥 he added.
Aside from the lower STT, CMEPA removed the documentary stamp tax on mutual funds and unit investment trust funds and introduced a 20% uniform final tax rate on interest income.
The law also allowed employers to claim an additional 50% tax deduction for Personal Equity and Retirement Account contributions as long as they match or exceed the employee鈥檚 contribution and removed certain tax exemptions, with government-owned or -controlled corporations now generally subject to the same passive income taxes as other institutions.
鈥淭his law enhances our competitiveness in the ASEAN region and strengthens the foundations of a capital market that can thrive on the global stage,鈥 Mr. Marcos said.
Mr. Marcos said CMEPA is expected to generate over P25 billion in net revenue for the government until 2030, which could be used to fund the construction of roads, bridges, hospitals, schools, and other social safety net programs.
鈥淏ut beyond revenue, CMEPA reinforces confidence. It shows that our financial system is becoming more equitable and structured for long-term stability,鈥 he said.
Mr. Marcos also urged market participants and stakeholders 鈥渢o uphold transparency, fairness, and good governance.鈥
鈥淏y working together in good faith, we can build an industry that earns the market鈥檚 trust both here and abroad,鈥 he said.
Meanwhile, PSE President and Chief Executive Officer Ramon S. Monzon said the lower STT will improve the local bourse鈥檚 regional competitiveness.
However, he said the lower stock tax should be complemented with other initiatives to grow the number of listed companies in the country and expand the PSE鈥檚 products and services.
鈥淎 few of the upcoming initiatives which we hope will support more trading activity include the amendment of the board lot table to make investing more affordable and accessible to Filipinos, regulations for global Philippine depositary receipts, streamlined requirements for securities borrowing and lending, and introduction of derivative products such as index futures,鈥 he said.
Mr. Monzon said the PSE will also coordinate with the SEC and other stakeholders to undertake reforms that will help make the local capital market more competitive, efficient, and investor friendly.
鈥淲e must also continue to find more ways to get more people to invest in the stock market instead of spending for nonessentials or throwing their hard-earned money on online gambling,鈥 he said.
On Tuesday, the bellwether PSE index rose 0.92% or 58.91 points to 6,423.85, while the broader all shares index climbed 0.46% or 17.69 points to 3,799.36. 鈥 Revin Mikhael D. Ochave
