The Securities and Exchange Commission (SEC) has thrown its support behind a proposal that seeks to lower taxes on stock transactions to attract more investors into the market.
Albay 2nd District Representative Jose Ma. Clemente Salceda filed last August House Bill (HB) 8958, or the proposed Capital Markets Efficiency Promotion Act.
The bill has undergone deliberations at the committee level and has been substituted by HB 9277, filed last September 21.
The proposal aims to bring the stock transaction tax down to 0.1 percent of the stock value from the current rate of 0.6 percent. The tax on dividends of foreign non-residents will be reduced to 10 percent from 25 percent.
Salceda, who also heads the House Ways and Means Committee, hopes that the lower taxes will bring them on a par with regional counterparts, and encourage more local and foreign investors to participate in the Philippine capital market.
“The SEC welcomes the efforts of our legislators to boost the capital market, as this recognizes the contribution and potential of the financial sector to help in the development of the Philippine economy, toward easing and improving the lives of all Filipinos,” SEC Chairman Emilio B. Aquino said.
“We will work closely with our lawmakers to ensure that new laws and policies will be reflective of the needs and demands of the market and investors, while still balancing the Commission’s role as regulator.”
The SEC has been stepping up efforts to encourage more investors into the capital market.
Recently, the SEC shortened the settlement cycle from three days to two days after the trade date by amending the 2015 Implementing Rules and Regulations of Republic Act 8799, or the Securities Regulation Code, through SEC Memorandum Circular 11, Series of 2023.
According to data from the Philippine Stock Exchange, fund raising from the sale of primary and secondary shares slowed in January to June with only P36.99 billion worth of capital raised compared with last year’s P61.92 billion.
In the first half, there were two initial public offerings (IPO), two follow-on offerings, three stock rights offerings (SRO) and six private placements. Last year, the PSE had 8 IPOs, one SRO and four private placements.
“The capital raising pipeline in the first half was not as robust as expected. There are offerings targeted in the next two months and hopefully, there will be additional IPOs before the year ends,” PSE President and CEO Ramon S. Monzon said.