More foreigners buying PH stocks since CMEPA, says PSE
Foreigners have been buying more Philippine stocks than they have been selling since a new law enhancing the local capital markets came into effect in July. This signals a more attractive environment for international investors.
Ramon Monzon, president and CEO of the Philippine Stock Exchange, on Wednesday said the local bourse recorded P5.8 billion in net foreign buying from July 1 to Sept. 23. This was a turnaround from the net selling of P32 billion seen in the first half of this year and P44 billion in 2024.
At the same time, Monzon noted that average year-to-date trading volume had gone up by 28 percent from the same period last year.
This comes nearly three months after President Marcos signed the Capital Markets Efficiency Promotion Act (CMEPA) into law in July.
Among the provisions of the law is the reduced stock transaction tax of 0.1 percent of the gross selling price of the shares. This was previously at 0.6 percent.
This means that if a trader wants to buy P10,000 worth of stocks, they will have to pay a P10 stock transaction tax instead of P60. Analysts and regulators hailed the passage of CMEPA, stressing that the Philippines had one of the highest friction costs in Southeast Asia before the law took effect.
“It’s very clear that the reduction of the stock transaction tax has encouraged more investors to trade in the market, perhaps because friction costs are much lower,” Monzon said during his speech at the Philippine Tax Academy Convention.
“We look forward to more volume and foreign participation in the market as a result of the CMEPA,” the CEO added.
