Market Profiles

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For further information or support around accessing this market, please contact your RBC IS representative.

The Philippine Stock Exchange, Inc (PSE)
PSE is the main stock exchange in the Philippines formed on 23 December 1992 out of amerger of the country's two former stock exchanges, the Manila Stock Exchange and the Makati Stock Exchange. It was initially established as a non-stock, member-governed organization until its demutualisation in 2002. On December 15, 2003, the PSE shares were listed by way of introduction.

The PSE consolidated its trading floors (it used to operate on two trading floors, one in Makati City and one in Pasig City) which is now housed in its office in Bonifacio Global City, Taguig.

The Philippine Dealing & Exchange Corp. (PDEx)
PDEx provides a centralized electronic infrastructure for trading fixed-income securities. The SEC granted the exchange registration in 2004 and was given the Self-Regulatory Organization (SRO) status in 2006 for the Inter-Dealer market, expanded its SRO status to include the Inter-Professional market in 2007 and further expanded its coverage to include the public market in 2008. PDEx is the trading arm of The Philippine Dealing System Group of Companies (PDS Group) which operates and maintains the trading system where fixed income instruments are traded.

Equities
PSE's trading system - the PSEtrade XTS was launched on 22 June 2015. The system is powered by NASDAQ which replaced the NYSE-powered PSEtrade, a platform that was used by the market since 2010. 

Government Securities
Primary trading is done by Government Securities Eligible Dealers (GSEDs) through the use of the Automated Debt Auction Processing System (ADAPS), whereby GSEDs tender their bids (both competitive and non-competitive) by keying-in the amount and yield of their choice using a BIS terminal in the GSED office. 

Bids are arrayed by the system in the terminals of the Bureau of the Treasury (BTR) where after the cut-off time of 13:00 hours the array is viewed by the Auction Committee, which then decides on the award. The award is keyed-back to the respective terminal of GSEDs (Note: primary trading is only open to GSEDs).

Secondary trading is done through a PDEx platform which is linked to the National Registry of Scripless Securities (NRoSS), the electronic book entry system operated by the Bureau of the Treasury. Trading participants are provided a front-end system (the Fixed Income Trading Workstation or FITW) through which quotes can be entered and/or amended and transactions are eventually executed. The system displays live bids and offer quotes as well as publishes transaction data to trading participants.

PDEx launched its new trading system for the PDEx Fixed Income Market, Bloomberg FIQ Trading System in November 2018.

PSE

9.00 am - Pre-open

9.30 am - Market open

12.00 pm - Market recess

1.00 pm - Market resumption

2.45 pm - Pre-close

2.50 pm - Run-off/Trading at last

3.00 pm - Market close

ISIN (International Securities Identification Numbering): Yes, for listed securities but is not generally used in the market.

Other: Listed stocks are also designated by a three or four letter trading symbol issued by the PSE. The Bureau of Treasury issues a series number for each government security. There is no standard system for other securities. Effective 01 June 2023, all original issuances will be assigned the international securities identifier (ISIN, CFI and FISN) by the SEC and BTr will no longer issue a separate domestic securities ID for these new issuances.

SEC secured membership as a partner in the Association of National Numbering Agencies (ANNA), a global association that seeks to foster standardization within the financial industry. As a partner, SEC will act as the national numbering agency for the Philippines primarily responsible for the allocation of ISIN, Financial Instrument Short Name (FISN) and Classification of Financial Instruments (CFI) codes to all instruments in the market, including unlisted securities.

Securities and Exchange Commission (SEC)
The SEC is the national government regulatory agency charged with supervision over the corporate sector, the capital market participants, the securities and investment instruments market, and the investing public. The SEC was created on 26 October 1936 by the Commonwealth Act 83 (aka The Securities Act) and was tasked to regulate the sale and registration of securities, exchanges, brokers, dealers and salesmen. Subsequent laws were enacted to broaden the SEC’s mandates, powers and functions such as: (1) The SEC Reorganization Act or Presidential Decree 902-A, which was subsequently amended by PDs 1653, 1758, and 1799, (2) The Corporation Code of the Philippines (CCP), (3) The Revised Securities Act or BP 178 which repealed CA 83, and (4) The Securities Regulation Code (SRC) or Republic Act 8799. The SEC is tasked with serious responsibility of enforcing all laws affecting corporations and other forms of associations not otherwise vested in some government offices. It also implements and acts either as lead or support agency in administering and enforcing special laws (e.g Anti-Monet Laundering Act, Financing Company Act, Investment Company Act, among others).

Part of the primary functions of the SEC are to formulate policies and recommendations on issues concerning the securities market, advise Congress and other government agencies on all aspects of the securities market and propose legislation and amendments to the existing legislations; regulate, investigate, or supervise the activities of persons to ensure compliance supervise, monitor, suspend and take-over the activities of Exchanges, clearing agencies and other SROs; impose sanctions for the violations of laws and the rules regulations and orders issued pursuant to its functions; and issue cease and desist orders to prevent fraud or injury to the investing public.

The Philippine Stock Exchange (PSE) / Capital Markets Integrity Corporation (CMIC)
The PSE was granted self-regulatory organisation (SRO) status in August 1988 which allows it the primary role of regulating its own members through the Market Regulatory Division (MRD). The SEC still oversees the PSE and reviews its findings. The PSE spun off its Market Regulation Division to separate its regulatory functions from its business functions. On 12 March 2012, the Capital Markets Integrity Corporation (CMIC) commenced its operations and functions as independent audit, surveillance and compliance unit having regulatory oversight over the trading participants of the Exchange. The SEC approved the Rules of the CMIC in February 2012 and in May 2012, the CMIC launched its new surveillance system called Total Market Surveillance (TMS system) which replaced the AWACS system. The CMIC is a wholly-owned subsidiary of the PSE with Board of Directors independent from the Board of Directors of the Exchange. CMIC has an SRO status. CMIC will be conducting annual regulatory examination of trading participants on their compliance with the relevant provisions of the Securities Regulation Code and its implementing rules and regulations, the Risk-Based Capital Adequacy (RBCA) rules, the PSE rules and the CMIC rules. CMIC operates the Total Market Surveillance (TMS) system (developed by the Korea Exchange), an automated surveillance system, featuring detection rules.

Bangko Sentral ng Pilipinas (BSP)
The BSP is the central bank of the Republic of the Philippines. It is the government body in charge of monetary policy of the country and has jurisdiction over the banking industry in the Philippines. The BSP was established in 1993 pursuant to the 1987 Philippine Constitution and the New Central Bank Act of 1993. Needless to say, the BSP took over the then Central Bank of the Philippines which was established in 1949. It enjoys fiscal and administrative autonomy from the national government. The primary responsibility of the BSP is to provide policy directions in the areas of money, banking and credit to maintain price stability conducive to a balanced and sustainable growth of the economy, promote and maintain monetary stability and the convertibility of the Peso.

Philippine Dealing & Exchange Corp. (PDEx)
PDEx was incorporated in 2003 to provide trading infrastructure for the fixed-income (FI) and foreign exchange (FX) markets. As an SEC-registered FI Securities Market, it facilitates the operation of the organized secondary market for the trading of FI securities which includes both Government and Corporate Securities. PDEx, as an SRO (Self-Regulatory Organization), has been given authority by the SEC to create and enforce its own rules, monitor and enforce compliance with securities laws and regulations, and enforce fair, ethical and efficient practices in the securities market with the primordial objective of investor protection. It enables the maintenance of a level playing field among players in the market, to assure investors of fairness and safety in the marketplace.

Immobilised:
The Philippines has been trading in scripless form since 1997. Philippine Depository & Trust Corporation (PDTC) eligible securities held by the central depository are immobilised. These securities are lodged in PDTC's eClear and Settle (eCS) system via book entry and are registered in the name of its nominee, PCD Nominee Corporation (PCNC). PDTC uses book-entry system to record the ownership of shares. Movement of shares is effected via electronic debit and credit of the securities accounts of the participants. The Securities Regulation Code requires that all transactions in the Exchange are settled in scripless form.

The PSE implemented a no-jumbo rule such that effective July 1, 2010, listed companies should no longer hold "jumbo" certificates and new or additional issuances of shares to be listed in the PSE should be issued in scripless form and without a jumbo certificate. 

Dematerialised:
All eligible government securities are registered with Bureau of Treasury (BTr)-Registry of Scripless Shares (RoSS) in dematerialised form. Securities settle electronically and in real-time through book-entry transfer. RoSS has sole legal authority to transfer title to securities without dispute or encumbrances. 

Physical:
Although the market is mainly scripless, investors holding investment in equities have the option to hold it in physical certificates. Investors also have the option to convert scripless shares to physical certificates. In the re-materialization process, shares are uplifted from PDTC and held in physical form in the name of the investor, the custodian's nominee name or in street name. The period to uplift and register the securities takes about 2-4 weeks, while some transfer agents accept requests for expediting the issuance of the certificates but for a higher fee. Unlisted securities which are not PDTC-eligible are held and traded in scrip form.

The PSE has implemented a circuit breaker rule for the stock market. The rule states that a 15 minute trading halt will be implemented if the PSE index decreases by at least 10% compared to the previous day's closing level. The trading halt can only be executed once in a trading day and will not be triggered if the drop in the PSE index, by at least 10%, occurs 30 minutes before the market closes.

Equities:
The PSE uses a reference price which is: (a) the previous Trading Day's Closing Price; (b) The Adjusted Closing Price (ACP) in the event of corporate actions that would result to an adjustment of the Closing Price; or (c) the Last Traded Price or the last ACP in cases where there is no trading activity for the security in the immediately preceding trading day.

Under the PSE's new trading rules, the price of an order shall be within the trading threshold for the trading day. The trading thresholds are classified as the Static and Dynamic Thresholds.

The Static Threshold previously known as the Floor and Ceiling Price is now the upper Static Threshold which is 50 percent above the Reference Price (previous day's closing price) and while the lower Static Threshold which is 50 percent below the Reference Price.

The Dynamic Price Threshold is defined as the permitted difference in price between twolast traded price updates for a given security. It is the maximum allowable price difference between the LTP of a given security and its preceding LTP equivalent to the designated percentage of the said security. The percentage to be designated on a given security is based on the Security cluster said security belongs: last traded price minus the last traded price multiplied by the dynamic tick.

Newly listed Securities shall have a Dynamic Threshold of 20%. The Review of the Dynamic Threshold is conducted semi-annually. The result of the review is published by the Exchange prior to the effectivity of any reclassification.

The Exchange implements the freezing of a security in relation to its price movements such as when it breaches the trading thresholds.

Debt:
Government Treasury Bills uses English Style or the price discrimination method where participants openly bid against one another with each successive bid higher than the previous one. Winning parties pay the corresponding price bid.

Fixed Income Treasury Notes (FXTN) uses Dutch auction style where the method of pegging a uniform coupon rate of a Treasury bond at the stop-out level of arrayed amounts bid with the corresponding yield rate tendered. Customarily, the rate is divisible by one-eight of 1%.

¹New Securities listed in the PSE is subject to the 20% Dynamic Threshold

PHP

Listed shares and stocks not listed on the PSE, but registered and licensed for sale by the Securities and Exchange Commission, may be traded over-the-counter by brokers. Transactions are executed by direct inquiries and negotiation between dealers.

Book-Entry: PSE listed equities are settled on a DVP Model 3 or Multilateral Net Settlement where the Securities Clearing Corporation of the Philippines (SCCP) stands as the Central Counterparty to all PSE trades. Rolling settlement on T+3.

T (Trade Date) A buy or sell order is placed with the broker and the trade is executed. All transactions matched in the trading system are downloaded to the clearing system of SCCP, Central Clearing and Central Settlement System (CCCS). The CCCS system performs the netting process as soon as the trades are uploaded. Multilateral net settlement is on a per broker, per security and per flag level (i.e. local client, foreign client, local proprietary, foreign proprietary) such that a Broker will only have a net buy or net sell position on a security of the same flag at settlement date. 

Confirmation of the trade is sent by the broker to the investor. This confirmation is the basis for sending settlement and foreign exchange (FX) instructions to the custodian bank. Broker-to-custodian settlement is on a gross trade-for-trade. 

T+1 Investor advises the custodian bank of settlement details and arranges FX for value settlement date. Establishing Standing Instructions with the custodian bank or embedding FX instruction in the MT54x will expedite settlement. FX instructions should specify funding for purchases or repatriation of sales proceeds. Standing instructions on the treatment of against payment trades will eliminate the need for individual FX instructions. These should be sent by authenticated means to ensure validity.

Trades are pre-matched with the counterparty. For Equities: Although  the depository system provides for pre-matching, participants continue to pre-match via exchange of pre-matching files and phone due to certain limitations that would support auto pre-matching. Once matched, trades are uploaded in PDTC for system pre-matching before these are released to counterparties.

T+2 (SD) Off-exchange transactions i.e. broker-to-custodian are settled in PDTC via its BaNCS V6 system. The market deadline for deliveries and receipts is strictly at 12:00 noon. Finality of stock movement occurs when both the delivery and receipt orders in the PDTC have been executed by both parties. Cash settlement between brokers and subcustodians is generally via RTGS or by direct entry in the broker's account and said funds must be received before 12:00 noon. Although there are still certain counterparties which continue to use manager’s check.

For Exchange transactions (broker-to-broker), securities are delivered to the brokers' settlement account while cash is deposited to the brokers' cash settlement account with their designated settlement bank. Delivery of securities and deposit of good cleared funds should be made no later than 12:00 noon of settlement date. SCCP has an interface with the depository and with the accredited settlement banks enabling real-time confirmation of both securities and cash in the brokers' settlement accounts. Check payments are still accepted provided that brokers maintain a Bills Purchase line with their settlement banks who confirms to SCCP the availability of good cleared funds. SCCP however has been encouraging the use of RTGS and a number of large brokers have adopted such mode of funding their due clearing obligations.

Under the Revised PSE Rules on Short Sale or Short Selling is any sale of a security that the seller does not own or any sale of a security that will be settled by the delivery of borrowed securities. Only Qualified Securities are allowed to be sold short. The PSE will determine the Qualified Securities based on market capitalization and tradability and publish a List of Qualified Securities which shall be updated from time to time. 

• Qualified Securities should have a market capitalization of at least Php10.0billion and tradability of 100% for the past six months prior to the date of approval of the List of Qualified Securities.
• Trading participants who engage in short-selling activities must maintain ledgers which record the full and complete details of all the trading participant's short-selling transactions and accomplish a daily summary report of all its short selling activities. The PSE shall make available in its website the short-selling activities at the close of each trading day.
• Short sale transactions have to be executed in accordance with the Up Tick rule where the transaction should be done at a price that is higher than the last sale price, or at a price of the last sale but only if that price is above the next preceding different sale on such day.
• Trading participants must inquire from the client whether at the time of order the client owns the security and can deliver on settlement date, or if client is acting on behalf on another party, that they know the principal owns the securities to be sold and must take reasonable steps to ensure that such disclosure made by the client is accurate.

The Exchange may impose a fine of not less than PHP 20,000.00 but not more than PHP 50,000.00 for each transaction to the trading participant who will be found to have violated any provision of the Short Selling Rules. In the case where the trading participant has violated any provision of the Short Selling Rules twice, the Exchange, at its discretion may suspend his trading participant pursuant to the PSE Rules.

The Short Selling Rules is dependent on the implementation of the Exchange's Securities Borrowing and Lending (SBL) Program as the Exchange does not allow naked short selling.

The PSE intends to re-launch its SBL Program in October 2023 with the recent approval by the SEC to accept offshore collateral for SBL transactions involving a foreign counterparty and PDTC’s application to extend its lending agent license to include equities. The PSE, however, is still working to secure BIR’s approval to accept the Global Master Securities Lending Agreement (GMSLA).

Turnaround trades are allowed provided that the instructions are received at the same time and prior to the settlement date to facilitate the pre-matching process. Any problem encountered on any ‘leg' of the trade, i.e., whether on the buy side or sell side of the trade, may result in the failure of the turnaround trade. Therefore, it is crucial for trade instructions to be in order as well as the funds and/or shares are available on settlement date.

The Securities Clearing Corporation of the Philippines (SCCP) - is a wholly-owned subsidiary of the Philippine Stock Exchange which is primarily established as a clearingand settlement agency for trades executed in the PSE. It is responsible for establishing the liabilities between trading participants of the Exchange, synchronising the settlement of funds and the transfer of securities and guaranteeing the settlement of trades in the event of a trading participant's default. In 2006, SCCP assumed the role of a central counterparty by means of the maintenance and administration of the Clearing and Trade Guarantee Fund (CTGF).

Philippine Depository and Trust Corporation (PDTC) is a private institution majority owned by the Philippine Dealing System Group of Companies (PDS Group), the operator of the Fixed Income Exchange. PDTC was established to act as a depository with a system for the central handling of securities whereby all securities of an issuer deposited within the system are immobilised and dematerialised such that these are treated as fungible and maybe transferred, or dealt with via book-entry without physical delivery of the stock certificates. The PDTC was likewise granted the authority to operate as a registry, custodian, trustee and/or intermediary of its participants of any and all kinds of securities, monetary or financial instruments and their derivatives and to borrow instruments for relending. 

Bureau of the Treasury is the depository for the clearing and settlement of treasury bills and government bonds in the Philippines market. It operates the National Registry of Scripless Securities (NRoSS), an electronic system for the official registration of ownership of scripless/uncertificated government securities (treasury bills and government bonds) from the time of origination to redemption. All eligible government securities are registered with BTR-NRoSS in dematerialised form. Securities settle electronically and in real-time through book-entry transfer.

BIS is an international organisation which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. The Committee on Payments and Market Infrastructures (CPMI) uses three common structural approaches, or models, to categorise the links between delivery and payment in a securities settlement system.

BIS Model 1: Systems that settle transfer instructions for both securities and funds on a trade by trade (gross) basis, with final (unconditional) transfer of securities from the seller to the buyer (delivery) occurring at the same time as final transfer of funds from the buyer to the seller (payment).

BIS Model 2: Systems that settle securities transfer instructions on a gross basis, with final transfer of securities from the seller to the buyer (delivery) occurring throughout the processing cycle, but settle funds transfer on a net basis, with final transfer of funds from the buyer to the seller (payment) occurring at the end of the processing cycle.

BIS Model 3: Systems that settle transfer instructions for both securities and funds on a net basis, with final transfers of both securities and funds occurring at the end of the processing cycle.

For Government Securities: 
Model 1 - Gross settlement of securities followed by gross settlement of funds.

For Listed Equities:
Model 3 - Multilateral net settlement of securities and funds for Exchange trades (Broker-to-Broker transactions). 

Model 2 - Securities are settled on a gross basis and cash is settled on a net basis. (Custodian-to-Custodian transactions effective April 2010)

Model 1 – Gross trade by trade settlement of securities and funds for non-exchange transactions (Broker-to-Custodian transactions, Custodian-to-Custodian transactions).

Book-Entry:

Equities - as the market is mainly scripless, there is no need for share registration as all immobilised shares are held by the PDTC and are registered in the name of PCD Nominee Corporation (PCNC).

Debt Securities - Government securities are dematerialised and are lodged in the Registry of Scripless Shares (RoSS).

Physical: Investors have the option to keep scrip shares. Physical shares can be registered in the following manner:

• registered in the investor's name
• registered in a nominee's name.

The beneficial owner's records maintained by the transfer agent cum registrar are considered final in the event of a discrepancy.

For those investors requiring physical shares, a copy of the upliftment request (UR) to PDTC has to be forwarded to the local subcustodian by the broker evidencing that scripless shares have been uplifted to physical form. The UR is to be kept by us until receipt of actual physical certificates. Uplifted shares are monitored via outstanding registration report until receipt of physical certificates. 

A weekly listing of outstanding scrips receivable is prepared and both verbal follow-ups and written tracers are made with the brokers to ensure investors' protection against brokers' risks. An MT508 is generated upon delivery of shares to the registrar and again upon receipt of shares from the registrar.

The registrar or transfer agent is the company/person appointed by the company to keep a record of the ownership of the shares. They are also in charge of monitoring the foreign ownership limit of the security, issuance of certificates, and submitting disclosure information to regulators.

Per market practice, it usually takes 2 to 3 weeks for the new certificates to be available. Registration for unlisted / delisted securities could take longer, especially if the company does not have a published registrar / transfer agent.

Shareholdings in this market may be required to be disclosed by the beneficial owner, particularly when such shareholdings reach or exceed the prescribed disclosure limits.

The primary bases for the disclosure requirements in the Philippines are provided in Section 18.1 and 23.2 of the Securities Regulation Code (SRC) as well as certain disclosure requirements provided in the Circulars issued by the Bangko Sentral ng Pilipinas (BSP) as enumerated:

1. Disclosure Requirement of 5% (SRC Rule 18.1)
   Every person who directly or indirectly acquires the beneficial ownership of more than 5% of any class of equity securities of a company shall within 5 business days after such acquisition, submit to theissuer, any exchange on which securities of the issuer are listed (the Exchange) and the Securities and Exchange Commission (SEC) a sworn statement containing the information required by SEC Form 18-A. 
   
   The SEC has imposed a penalty for late filing, non-reporting and incomplete reporting of the disclosure of 5% beneficial ownership.
   
   
2. Disclosure Requirement of 10% (SRC Rule 23)
   Everyperson who is directly or indirectly the beneficial owner of 10% or more of any class of any security of a company shall
   1. within 10 days after the effective date of the registration statement for that security, orwithin 10 days after he becomes such beneficial owner subsequent to the effective date of the registration statement, whichever is earlier, file with the SEC and the Exchange Form 23-A indicating the amount of all securities of such issuer of which he is the beneficial owner.
   2. within 10 days after the close of each calendar month thereafter, if there has been any change in such ownership during that month, file a statement on Form 23-B with the SEC and with an Exchange, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during that calendar month.
   3. notify the SEC if his direct or indirect beneficial ownership of securities falls below 10%
3. Disclosure of Ultimate Beneficial Owners of Bank Shares (BSP Circular 238-00, BSP Circular 718-11 and BSP Memorandum M-2011-058)
   Under the Manual of Regulations of Banks, the BSP requires the corporate secretary of the bank to disclose, under oath, the ultimate beneficial owners of bank shares held in the name ofPhilippine Central Depositary Nominee Corporation in the annual (or quarterly whenever changes occur) report on Consolidated List of Stockholders and Their Stockholdings which includes the numbered, trust and custodial accounts. As such, clients with holdings in banks whose shares arelisted on an Exchange, may be requested to report the ultimate beneficial owners of said shares upon request by the banks' corporate secretaries.
   
   Any willful delay in the submission of said report shall subject the bank to the corresponding fines for delayed reports to be reckoned on the day following the due date of submission until the correct report is submitted to the BSP.
4. Substantial Shareholding Reporting (BSP Circular 332-02)Manual of Regulations of Banks
   Every natural person acquiring shares cumulatively amounting to at least 2% of the total subscribed capital of a domestic bank must disclose to the bank all relevant information on all persons related to him within the fourth degree of consanguinity or affinity, whether legitimate, illegitimate or common law as well as corporations, partnership or associations where he has controlling interests. A corporation acquiring shares amounting to at least 2% of the total subscribed capital of a domestic bank must disclose to the bank its controlling stockholders or group of stockholders as well as the corporations, partnerships or association where such controlling stockholders or group of stockholders have controlling interest. The shareholders are likewise required to disclose to the Issuer, Exchange and the SEC once their shareholdings reach 5% and 10%, as required by the SEC.
   
   Failure to comply with the appropriate disclosure requirement may result in reprimands and warnings as well as fines up to 2% of each transaction amount or Php200.00 whichever is higher, plus Php200.00 per day of delay for repeat offenders.
   
   
5. Prior Approval Requirement on Transactions Involving Voting Shares of Bank Stocks (BSP Circular 718-11)
   Per BSP Circular 718-11, prior approval of the BSP Monetary Board is required for transactions involving voting shares of stock of a bank if such transaction in itself or in relation with other/previous transactions will:
   1. result in ownership or control of more than 20% of voting shares of stock of a bank by any person whether natural or juridical or which will enable such person to elect, or be elected as, a director of such bank; or
   2. effect a change in the majority ownership or control of the voting shares of stock of the bank from one group to another.
      
      If the transaction will involve a significant change in the ownership structure and/or controlling interests in a bank both stockholders (transferor and transferee) must submit an application for prior BSP Monetary Board approval of the transfer to the Supervision and Examination Sector of the BSP. Any willful delay in the submission by the transferor and transferee of the request for prior Monetary Board approval, together with the required supporting papers/documents, within 60 days from transaction date or 30 days from the date of receipt by the bank's corporate secretary of the request for registration of the said transaction, (whichever is earlier) shall subject the transferor, the transferee, or both, to a fine of not less than Php50,000.00 nor more than Php200,000.00 or imprisonment of not less than 2 years nor more than 10 years, at the discretion of the court, without prejudice to the appropriate legal actions for the rescission and invalidation of the transaction.
      
      The request should be accompanied by supporting documents on the suitability of the transferee-stockholder, which includes evidences on the integrity, probity, financial capacity, business experience, and educational background of the individual stockholders or of the persons behind the corporate stockholders. It should also be accompanied by an affidavit attesting that the stockholder is a bona fide owner of the voting shares of stock in the bank in his or its own right, and not as a dummy of any other person, whether natural or juridical.

6. Updated Anti-Money Laundering Rules and Regulations (BSP Circular 706-11)
The updated rules stipulate that a covered institution may rely on the customer identification process performed by a third party (trustee/nominee/agent/intermediary) provided that the covered institution obtains a sworn certificate from the third party that the latter has conducted the requisite customer identification requirements to establish the existence of the ultimate customer, and that the third party has in its custody all the minimum information/documents required from the customer. The covered institution may also obtain identification documents from the third party, upon request and without delay.

The buy-in or sell-out procedures can be invoked by the clearinghouse, Securities Clearing Corporation of the Philippines (SCCP), in an event of a settlement fail. 

Buy-in Procedures:

• Beyond the Market Deadline of 12:00,of SD

In the event of a security fail, SCCP will hold the following in its Nostro Account: the defaulting member's cash entitlement equivalent to the amount of the securities fail or if the defaulting member has no money entitlement of its money entitlement is less than the amount of the security fail, securities whose market value is equivalent to the amount of deficiency.

SCCP will still accept delivery of securities until 09:15 of SD+1 to pay the cash. If the broker still fails to settle, the. SCCP conducts may enter into a sell-out at 09:30securities borrowing in behalf of its defaulting member in order to acquire the necessary securities for settlement.

• Beyond 17:00 of SD

In the event that the net selling clearing member fails to deliver the securities by 17:00 of SD and a borrowing of the securities had not been successfully executed with a potential lender either by the defaulting member or by SCCP in behalf of its defaulting member, it shall be considered an overnight failed trade. 

SCCP shall advise the defaulting member of the buy-in procedures it will undertake upon its failure to deliver the securities by 0915 of SD+1.

• Beyond 09:15 of SD

Upon failure by the defaulting member to deliver the securities in whole by 0915 of SD+1, SCCP will suspend the defaulting member. The suspension will be posted in the PSE website and in both trading floors of Makati and Tektite in order to avoid further dealings by the investors and trading participants with the said suspended member.

SCCP shall undertake a buy-in procedure at 1000 of SD+1 in order to acquire the securities that need to be delivered to the affected clearing member(s) through a designated trading participant. This transaction shall be held confidential.

All expenses or costs arising from the buy-in transaction will be charged to the defaulting clearing member in addition to the penalties stated in the Sanction Table. 

The buy-in transaction/s shall be settled earlier than the regular settlement cycle as far as practicable. If early settlement is not possible, then Buy-In shall follow the regular settlement cycle.

The buy-in price shall be the prevailing offer or market price as of execution of the buy-in. In any event that there has been no offer price set, the buy-in price shall be determined by setting the price lower than:

• The last closing price plus two price fluctuations
• The last closing price less two price fluctuations
• The last transaction price
• Current bid price or market price

until the buy-in procedure is completed. If the buy-in price is lower than the contract price, the difference between the buy-in price and the contract price would be credited to the Clearing and Trade Guarantee Fund (CTGF). If the buy-in price is higher than the contract price, the difference would be charged to the defaulting clearing member.

The buy-in fee is PHP 1,000 + 0.00125 of the value of the value of the cash or securities delayed. This penalty will be levied for late cash or securities settled after 12.00pm until 2.00pm on SD. For cash or securities settled after 2.00pm (failed settlements) or not settled at all, SCCP imposed a penalty of PHP 1,000 + 0.0025 of the value of the cash or securities, compounded daily until completely paid.

Furthermore, the SCCP management, at its discretion, can accept cash as collateral no later than 5.00pm on SD upon failure by a clearing member to deliver securities for reasons beyond the clearing member's control. The defaulting clearing member will be given until 10.00am on SD+1 to deliver the securities or face suspension. Once the 10.00am deadline has lapsed, the SCCP Management is authorised to use the cash submitted as collateral to purchase securities during the buy-in process.

Sell-Out Procedure

• Beyond the Market Deadline of 12:00 of SD

In the event that a buyer fails to meet the payment deadline for the settlement of his trade, SCCP will advance the corresponding amount (payment) to the selling counterparty either through the availment of its credit line with any of the settlement banks or withdrawal from the CTGF account. 

SCCP will choose securities from any of the defaulting clearing member's security entitlements whose market value of selected securities to be held by SCCP shall be at least equivalent to the amount of the cash fail, until payment has been made.

• Beyond 09:15 of T+3

If defaulting clearing member fails to deposit good cleared funds by 0915 of SD+1, SCCP will suspend the defaulting member. The suspension will be posted in the PSE website and in both trading floors of Makati and Tektite in order to avoid further dealings by the investors and trading participants with the said suspended member.

SCCP will automatically execute a sell-out at 10:00 of SD+1 with a designated Trading Participant(s). 

All penalties and charges such as applicable taxes and transaction costs and penalties for the use of the CTGF will be deducted from the proceeds of the sale in order to liquidate the account of the defaulting clearing member.

The sell-out transaction/s will be entered into the PSE trading system as a normal trade which shall undergo regular settlement wherein settlement date shall take effect on SD.

The sell-out price shall be the prevailing bid or market price as of execution of the sell-out. In any event that there has been no bid price set, the sell-out price shall be determined by setting the price higher than:

• the last closing price less two price fluctuations;
• the last transaction price;
• or current bid price or market price, until the sell-out procedure is completed.

If the sell-out price is higher than the contract price, the difference between the sell-out price and the contract price would be credited to the CTGF. If the sell-out price is lower than the contract price, the difference would be charged to the defaulting clearing member.

Acceptance of Cash Collateral

In the event of a securities fail, SCCP may accept cash collateral no later than 5:00 pm on SD where the defaulting member will be given until 10:00 am of SD+1 to deliver the securities otherwise face suspension. The cash collateral may be used by SCCP to purchase securities in its Buy-In process.

The Philippine Stock Exchange, Inc. (PSE), the Securities and Exchange Commission (SEC), the Bureau of Internal Revenue (BIR), the Bangko Sentral ng Pilipinas (BSP), and the Department of Finance (DoF), have completed the regulatory framework to facilitate the implementation of Securities Borrowing and Lending (SBL) facility in the Philippines. Under the same framework foreign or non-resident borrowers must observe foreign ownership limits as provided under the Philippine Constitution. A lending agent must be duly registered with the SEC and parties in an SBL transaction must execute a Master Securities Lending Agreement (MSLA) duly register with the Bureau of Internal Revenue to be eligible to the tax-free treatment prescribed by the BIR. 

The following are the local rules and regulations which govern the conduct of SBL transactions:

• BIR Revenue Regulations No. 10-2006, as amended by BIR Revenue Regulations 1-2008
• SEC Memorandum Circular No. 7, series of 2006
• PSE Rules and Guidelines on SBL

In order to qualify for a tax-free treatment, participants must comply with the above BIR Revenue Regulations and Republic Act No. 9243.

The Philippine Depository & Trust Corporation (PDTC) launched a Securities Borrowing and Lending (SBL) Program in the 2008 initially covering government securities. Under this program, PDTC acts as Lending Pool operator in behalf of the lenders and as a Collateral Manager for the underlying collateral posted by the borrowers. Both securities and cash are eligible as collateral. Only securities listed in an exchange and securities issued by the Bureau of Treasury or the Bangko Sentral ng Pilipinas (BSP) are eligible for lending under SBL transactions. These securities must be in electronic form or immobilised and free from lien and encumbrances. 

The collateral equity securities must be components of the Philippine Stock Exchange Index (PSEi), whereas the collateral government securities must be those issued by the Bureau of Treasury or the BSP. The collateral securities must be in electronic form or immobilised and free from lien and encumbrances. The collateral should be equivalent to at least 105% of the borrowed stock, in the form of cash, stocks and government securities.

Tax: The BIR Revenue Regulations No. 10-2006 and Revenue Regulations No. 1-2008contains prescribed guidelines and conditions for the tax treatment of SBL transactions involving the shares listed in the PSE. Under the said regulations, SBL transactions of shares listed in PSE, as well as the delivery of collateral are not subject to stock transaction tax or capital gains tax and documentary stamp tax on a condition that duly executed MSLA is registered with the BIR, the SBL is executed in accordance with the rules of the SEC and such is under the supervision of the PSE. All other applicable taxes, however, shall continue to apply. In the event of a Deemed Sale, such transaction shall be subject to net capital gains tax and documentary stamp tax. 

Repatriation of Proceeds from SBL Transactions: In addition, the BSP has drawn up rules in order to facilitate the repatriation of proceeds from SBL transactions. Certain limitations when borrowing shares from local lenders will limit the ability to convert proceeds from such a transaction to foreign currency, but these limitations would not be applicable when shares are borrowed from a foreign entity if the original investment is covered by a license to convert local to foreign currency, issued by the central bank when a foreign investor registers their investment in the country. 

The BSP has also issued its guidelines with regard to treatment of the Bangko Sentral Registration Document (BSRD). 

In practice, SBL is mainly being done bilaterally between the member-brokers for settlement purposes. The PSE, however, is set to re-launch its SBL Program in October 2023 for both bilateral and lending agent arrangement (PDTC as lending agent) with the following approvals granted by the SEC this year:

• Acceptance of offshore collateral in an SBL transaction where one of the parties is a foreign investor.
• Approval to extend the lending agent license of PDTC to include equities

Currently, the PSE is working to obtain the approval of the BIR to accept international Global Master Securities Lending Agreement (GMSLA).

The Securities Investors' Protection Fund
Safeguards investors against fraud, broker failure or insolvency. It is only available to investors of securities companies which are forced to liquidate. According to SIPF Rules, the amount available to satisfy the claims of each customer shall not exceed PHP100,000.00. The maximum amount payable from the Fund at any one time shall not exceed 75% of the total fund, with the remaining 25%, or the amount of PHP 50 Million, whichever is higher, kept as reserve. 

Currently, the SIPF issued Board Resolution No. 002-08 mandating the payment of PSE endorsed claims as follows:

• For claims of PHP 5,000.00 or less, the customer shall be paid in full.
• For claims of more than PHP 5,000.00 but less than PHP 100,000.00 the customer shall be paid the equivalent of 75% of his claim or PHP 5,000.00, whichever is higher.
• For claims of PHP 100,000.00 or more, the customer shall be paid PHP 75,000.00.

Republic Act No. 9160 otherwise known as The Anti-Money Laundering Act (AMLA) of 2001 provides responsive anti-money laundering legislation in order to establish and strengthen an anti-money laundering regime in the country. Salient features include:

• Criminalises money laundering
• Creates a financial intelligence unit
• Imposes requirements on customer identification, record keeping and reporting of covered and suspicious transactions
• Relaxes strict bank deposits secrecy laws
• Provides for freezing/seizure/forfeiture/recovery of dirty money/property
• Provides for international cooperation

The BSP in January 2011 issued BSP Circular 706, updating the Anti-Money Laundering regulations to effectively implement provisions of Republic Act 9160 and 9194. A covered institution, per the updated rules, may rely on the customer identification process performed by a third party (trustee / nominee / agent / intermediary) provided that:

1. The covered institution obtains a sworn certification from third party that the latter has conducted the requisite customer identification requirements to establish the existence of the ultimate customer, and;
2. The third party has in its custody all the minimum information / documents required from the customer.

The covered institution may also obtain identification documents from the third party upon request without delay. Additional requirements may have to be submitted in specific circumstances.

Covered institutions include banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, foreign exchange dealers, etc. The regulation applies to covered institutions supervised and regulated by the BSP, including their subsidiaries and affiliates. 

Two (2) AMLA Reform Bills were passed in June 2012: (1) Republic Act 10167 otherwise known as "An Act To Further Strengthen The Anti-Money Laundering Law". Republic Act 10168 otherwise known as "The Terrorism Financing Prevention And Suppression Act of 2012" and in February 2013: the Republic Act 10365 as "An Act Further Strengthening the Anti-Money Laundering Law".

In March 2017, the BSP made amendments to Part Eight or the Anti-Money Laundering Regulations of the

Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions.

The BSP released Circular 1022 in November 2018 (Amendments to Part Eight of the Manual of Regulations for Banks/Manual of Regulations for Non-Bank Financial Institutions and Circular No. 980 dated 06 November 2017).

In October 2018, the BSP approved amendments to existing regulations which tighten the reporting requirements for BSP-supervised financial institutions (BSFIs) on cyber-related incidents and operational disruptions. From 10 days, BSFIs are now mandated to report cybersecurity breaches within 2 hours from discovery of the incident. After the initial notification, the affected BSFIs are mandated to submit a follow-up report within 24 hours from the incident containing information such as the manner and time of initial detection, impact of the incident, and initial remedial response. This is necessary in view of the speed of exploitation, proliferation of attack tools and actors, and potentially massive extent of damage from cyber-related incidents. Prompt reporting of these incidents equates to the BSP having quick access to information hence will enable them to alert other banks, industry associations, and other relevant stakeholders that may be affected by a specific attack. With enhanced visibility on the changing IT risk landscape, the BSP can proactively ensure that the impact of cyber-related incidents and their resulting risks are minimized and contained to avert potential systemic risks to the financial system.

The new regulations further strengthen the BSP’s cyber-threat surveillance capabilities crucial for industry-wide cyber-preparedness, protection and crisis management.

The following are the Philippine laws on Anti-Money Laundering:

• Republic Act No. 9160
• Republic Act No. 9194
• Republic Act No. 10167
• Republic Act No. 10365
• Republic Act No. 10927
• Republic Act No. 11521

For clients serviced out of certain locations this is an FII market. Please refer to the Terms & Conditions for Global Custody or contact your RBC Investor Services' Client Manager before making portfolio investments.

Foreign investment is limited to 40% for securities on the Foreign Investment Negative List. 

Generally, foreign Investment Act of 1991 governs the regulations on foreign investments in the Philippines. This Law opened the Philippine domestic market to 100% foreign ownership except those included in the Foreign Investment Negative List (FINL), a shortlist of investment classified as List A and List B, where List A consists of areas of activities reserved to Filipino nationals and foreign equity participation listed is limited to 40%. List B consists of areas of activities wherein foreign ownership is limited such as defense or law enforcement-related activities, which have negative implications on public health and morals, and small and medium-scale enterprises.

The FIA of 1991 provides a provision under Section 9 allowing former natural-born Filipinos to engage in activities under List B of the FINL where such investments will be treated as Filipino or forming part of Filipino investments in activities closed or limited to foreign participation. These rights however do not extend to activities under List A of the FINL as such are reserved for Filipino citizens under the Philippine Constitution.

Foreign investors are restricted to owning "Class B" shares or the new single class of shares. Stock transfer agents monitor the ceiling on foreign ownership while the Philippine Stock Exchange provides a monthly report on Foreign Ownership Level of Exchange-listed stocks. 

Effective 04 April 2023, foreign investors may fully own select industries covered by Republic Act No. 11659 or the Amendments to the Public Services Act.Under Executive Order 175, attached is the 12^th regular Foreign Negative Investment List.

Each purchase must be registered with Bangko Sentral ng Pilipinas (Central Bank) to allow subsequent income on said investment i.e. sale proceeds or dividends to be repatriated through the banking system. As per BSP Circular 698, prior approval is no longer required for foreign investors to repatriate excess PHP funds not used for investments. Foreign investors can repatriate excess PHP funded with inward remittances of FX, including funds arising from the disapproved subscription of PSE listed shares during a rights offering subject to conditions and documentation requirements. 

BSP Circular 1030 allows repatriation of the following without the requirement to utilize 50% of the inward remittance:

1. Disapproved subscriptions or oversubscriptions
2. Erroneously remitted funds relating to investments
3. Similar cases

Proof of inward remittance together with the purchase invoice must be provided by the subcustodian to complete the registration process. 

Exchange control regulations do not allow foreign investors to run overdrafts in PHP. The Central Bank imposes a minimum 90-day freeze on foreign funds placed in peso time deposits.

Parking of US Dollars converted from Philippine pesos in a FCDU account is not allowed unless account holder would allow the regulator to scrutinise the account. Foreign currency converted from PHP arising from proceeds from sale of securities or from corporate actions entitlements (i.e., stock dividends, cash dividends) and which funding was originally remitted into the country by the non-resident investor or his global custodian, may be temporarily parked in the FCDU account. 

PHP proceeds resulting from inward remittances of foreign currency that lie on demand or savings accounts will not be formally registered as investments that can be repatriated unless further invested in BSRD-eligible instruments. Additionally, proceeds and income from the aforementioned investments such as those arising from corporate actions, e.g. cash dividend and interest income from treasury notes, may be repatriated only when supported by the required BSRD.

BSRD issued for PHP time deposits will be cancelled if the deposits are pre-terminated before 90 days. 

The Manual of Regulations on Foreign Exchange Transactions (MoRFXT) consolidates the foreign exchange regulations of the BSP.

The market deadlines for the various payment methods of local currency (Pesos) in the Philippines are as follows:

Clearing cheques 12:00
Administered by the Philippine Clearing House Corporation (PCHC) of which the transfer is subject to a one-day clearing period. Cheques received after the deadline are considered late for deposit and will start clearing the following business day.

Check Image Clearing System (CICS):

CICS allows the electronic clearing of checks via electronic presentment. Only the digital images of checks and their electronic payment information are needed to be transmitted to the paying bank, allowing funds to be available next day.

Philippine EFT System Operations Network (PESONet):

PESONet is an interbank account-to-account fund transfer system for bulk, recurring, non-time sensitive payments and collections. This is operated by the PCHC.

InstaPay:

Instapay is a real-time low value push ACH to provide real-time electronic fund transfers. InstaPay will allow payers to send instructions to their financial institutions to irrevocably transfer funds held in their account to the account of a payee, who receives the full value immediately. The service will be available 24/7 offering immediate credit to the beneficiary’s account
Philippine Payments and Settlements System (PhilPaSS)(system for Real Time Gross Settlement (RTGS)) 16:00
Payment is given same day value with no clearing period. Administered by the Bangko Sentral ng Pilipinas (BSP), transfer instructions among banks are executed via SWIFT/telex instructions. Payment orders done via RTGS are subject to a fee per instruction for the account of the investor. Quoted charges may differ from bank to bank. Both counterparties must agree on payment via RTGS.

Philippine Payments and Settlements System p^lus (PhilPaSS^plus) (system for Real Time Gross Settlement (RTGS) for Philippine Peso (PHP)) 17:45
 PhilPaSS^plus is the ISO20022-capable Philippine Peso (PHP) real-time gross settlement (RTGS) platform of the BSP launched in July 2021. It is the system where both processing and final settlement of funds transfer instructions can take place continuously (in real time). As it is a gross settlement system, transfers are settled individually. As it is a real time settlement system, the system effects final settlement continuously rather than periodically at pre-specified times provided that a sending bank has sufficient balances or credit. The settlement process is based on real-time transfer of central bank money. The system is available to participants until 17:45 PHT.

The Philippine Domestic-Dollar Transfer System (PDDTS)

PDDTS allows online, real-time gross settlement of domestic interbank USD transfer and third party account-to-account USD transfers. In addition, it provides a facility for online inquiry and settlement of foreign exchange transactions, where the PDDTS participants enter interbank USD and PHP transfer instruction in a single screen. The USD leg is settled via PDDTS while the Peso leg is transmitted to PhilPaSSPlus for settlement by the BSP. The system is available to participants until 16:00 PHT. Transfer of funds can either be via real time gross settlement or via net settlement at end of trading.

Any cancellation/amendment instructions received after these deadlines will be processed on a best efforts basis.

Note: Payment instructions coming into Standard Chartered Bank Philippines via SWIFT needs to be received by SC Philippines on or before 2:30 PM, local time.

Overnight overdrafts are not permitted in the Philippine Market as per local (central bank) regulations.

Entitlement is determined by reference to trade date versus the ex-date. Stock received with trade date on or after ex date are not entitled to the dividends / rights. Only those received with trade date before ex date are entitled. On the other hand, stock delivered with trade date before ex date are not entitled while those delivered with trade date on or after ex date are still entitled. The name of the investor should be reflected in the books of the registrar/transfer agent (for physical shares) or of the Philippine Depository & Trust Corp, on record date in order to actually receive the entitlements / rights. Where physical shares are not registered into the name of the investor as at record date, entitlement would accrue to the previous registered holder and a market claim would have to be initiated. For scripless trades failing to settle on value date, a market claim is also initiated.

Entitlements and/or new shares arising from subscriptions to offers are credited into cash/security accounts immediately upon receipt from PDTC / registrar / company's paying agent. Dividends with scripless parent shares are received from PDTC, net of withholding tax. Companies, although not officially required by law, usually authorise transfer agents to distribute payment to the PDTC on or before pay date, and funds are usually transferred to the subcustodian on pay date.

The international standard of determining ex date as RD-1 is adopted by the Philippine market under T+2 settlement cycle.

Quarterly, semi-annually or annually for blue chip issues. All others vary from company to company.

Semi-annually (Fixed Rate Treasury Notes), quarterly (Retail treasury Bonds)

Actual rate on payment date.

Custodians can provide assistance on outstanding dividends, rights or other entitlements. If a trade settles across a record/entitlement date, or if the securities are not registered in time, the custodian can file a claim as early as record date +1 for all income, rights or other entitlements belonging to its client, to receive the entitlement on pay date, or before the offer period (for rights issues). 

In the event entitlements are not received on pay date, the custodian will continue to pursue the claim from the counterparty.

On ex-date (end-of-day), it is established which holdings are entitled to the dividends. Should there be open trades, a notification is sent reflecting open trades and reconfirming correct ex-date position. This message is sent as early as one trading day after record date (ex date + two trading days). Also on said date, should an open trade be entitled to the dividends, first tracer is sent to counterparty to lay claim on the entitlement.

Foreign investors are entitled to exercise voting rights on series "B" shares and the new single class of shares subject to the set foreign ownership limit.

No

Provided in English. Annual general meetings and extraordinary general meetings are announced one to two months in advance.

On request, subject to availability

On request, subject to availability

Not required

Not applicable

Dividends paid to non-resident investors are subject to 25% tax. Stock dividends are exempt. Investors domiciled in treaty countries may avail of preferential treaty rates provided that supporting tax documentation is in place. 15% tax sparing rate will be applied provided that a) the domicile country of the non-resident foreign corporation shall allow a credit against tax of 10% effective January 1, 2021 or b) does not impose any income tax on dividends received from a domestic corporation.

The applicable withholding tax (WHT) rate can be reduced via relief at source subject to eligibility and compliance with relevant BIR regulations:

Relief at source via tax treaty

The Bureau of Internal Revenue (BIR) has issued its Revenue Memorandum Order (RMO) NO. 14-2021 which prescribed the documentary requirements and guidelines in applying for tax treaty relief, which is then supported by RMO No. 20-2022 confirming that Request for Confirmation (RFC) or Certificate of Entitlement to Treaty Benefit (COE) may be applied to subsequent and future income payments as the tenor allows.

Relief at source via tax sparing

The BIR has issued its RMO No. 46-2020 which prescribes the guidelines and procedures for the availment of the reduced rate of 15% on intercompany dividends paid by a domestic corporation to a non-resident foreign corporation (NFRC).   The 15% will apply if the country of the recipient subject to the condition that the country in which the non-resident foreign corporation (NRFC) is domiciled

(a) shall allow a credit against the tax due from the said NRFC which are equivalent to taxes deemed to have been paid in the Philippines equal to ten percent (10%) effective January 1, 2021, which represents the difference between the regular income tax rate for NRFC under Section 28(8)(1) of the NIRC of 1997, as amended, and the fifteen percent (15%) tax on dividends as herein provided; or,

(b) does not impose any income tax on dividends received from a domestic corporation.

Relief at source via Tax exemption

The BIR has issued its Revenue Memorandum Circular No. 8-2014 which prescribes the presentation of a valid, current and subsisting tax-exemption certificate or BIR Ruling to qualify for tax-exemption.

Coupon interest on government securities and corporate bonds are subject to 25% withholding tax rate. In practice, however, the BTr and Issuers apply a fixed rate of 20% across all taxable entities.

Net capital gains from shares not traded through the PSE are subject to 15% capital gains tax.

When preferred shares are redeemed at a time when the issuing corporation is still in its "going concern", capital gain (or loss) will be recognised on the basis of the difference between the amount value received at the time of redemption and the cost of the preferred shares and will be subject to the regular income tax rates imposed under the Tax code.

If the corporation voluntarily buys back its own shares, in which it becomes treasury shares, either the stock transaction tax (if listed and executed through the local stock exchange) or capital gains tax will apply.

Please refer to below link for the list of Philippine Tax Treaty Rates, which was taken from the BIR website https://www.bir.gov.ph/index.php/international-tax-matters/international-tax-agreements.html 

Documentary Stamp Tax: Php1.50 on each Php200.00 or fractional part thereof, of the par value of the shares, which is normally paid by the buyer to an OTC transaction (trade not executed through the PSE).

Stock Transaction Tax (Sales Tax on On-Exchange Transactions)
Sales of equities listed and traded on the PSE are subject to a stock transaction tax of 6/10 of 1% of the value of transaction charged to the seller.

Value Added Tax: the following are subject to 12% VAT:
Broker commission - Minimum commission of 0.25% up to maximum 1.5% of the transaction is payable by both buyer and seller

• Transactions worth below PHP 100 million – rate is 0.0025
• Transactions of PHP 100 million to PHP 500 million – rate is 0.0015
• Transactions above PHP 500 million – rate is 0.00125

Philippines Holiday Calendar

• Philippine Stock Exchange www.pse.com.ph
• Bangko Sentral ng Pilipinas www.bsp.gov.ph
• Securities and Exchange Commission www.sec.gov.ph
• Department of Finance www.dof.gov.ph
• Bureau of the Treasury www.treasury.gov.ph
• PDS Groupwww.pds.com.ph
• Bureau of Internal Revenue www.bir.gov.ph
• Securities Clearing Corporation of the Philippines www.sccp.com.ph
• Philippine Clearing House Corporation www.pchc.com.ph